Halifax administrators updated investors on the future of the beleaguered online stockbroking firm, with signs pointing to liquidation.
The firm - whose AFSL was suspended shortly after it went into voluntary administration in November 2018 - was found to have $19.7 million worth of deficiencies in client funds across the group, which is about 9% of its investor funds.
Corporate adviser Ferrier Hodgson said more than 12,600 investor claims and the significant volume of stocks to be realised might delay distributions for around six months.
The administrator's report lays blame for the company's predicament on the use of client monies to fund operating losses "since at least January 2017."
The report said contraventions of client monies rules and the Corporations Act appeared to have occurred, with operating expenses paid directly from client monies.
Ferrier Hodgson's report also noted it appears "extensive" co-mingling of client money occurred, with the funds of MT4 and MT5 investors effectively being used to top up IB investors. The report said that while the IB platform might have appeared "whole," it had been propped up by the funds of other clients.
Ferrier Hodgson said it determined the co-mingling of client funds may affect the claims of all investors across Halifax's three platforms in both Australia and New Zealand.
Separately, Ferrier Hodgson is set to become part of KPMG Australia, after the Sydney, Melbourne, Brisbane and Perth offices agreed to merge with KPMG.
The combined operation will see KPMG boast 27 partners and more than 200 specialists across restructuring, forensic, performance improvement and financial advisory services.