Millions withheld from Australian online traders as broker has licence stripped and accounts frozen

Millions withheld from Australian online traders as broker has licence stripped and accounts frozen

A muscle-flaunting Melburnian who boasts about his sports car collection and playing poker with underworld figure Mick Gatto is at the centre of a company holding millions of dollars in clients' money that can not be accessed.

Stavro D'Amore is the former director and chief executive of Melbourne-based Berndale Capital Securities, a company whose activities have caused such alarm that ASIC has intervened to freeze their accounts.

Prior to having its licence stripped late last year, Berndale operated as a broker operating in the opaque world of online foreign exchange — or forex — trading.

Several clients of Berndale have told the ABC that three months after the corporate regulator froze the company's accounts, they still haven't been able to get their money back.

One Berndale client the ABC spoke to had $250,000 in an account with the broker.

Mr D'Amore initially agreed to an on-camera interview with the ABC, before later saying he was unavailable. He is appealing against ASIC's decision and said all clients' money is safe, but can not be refunded because of the account freeze.

What is forex trading？

Forex trading is a highly complex and risky form of investment, which experts say is actually more akin to gambling.

It involves pitting one currency against the other in a series of micro-trades. If the exchange rate goes up in favour of the currency you have backed, you make a profit.

The constantly fluctuating nature of foreign exchange rates makes it a highly volatile form of trading.

Forex's booming popularity has led to governments around the world cracking down and, in some cases, banning forex trading altogether.

While allowed in Australia, ASIC warns forex trading “requires a huge amount of knowledge, research and monitoring,” because currency markets are highly unpredictable and can be affected by so many factors.

Monash University professor Mark Crosby said the confusing nature of forex brings with it extreme levels of risk.