You can do a search on twitter for $HDY and see what this mess...

You can do a search on twitter for $HDY and see what this mess is all about.

Red flags here as soon as Robin Armstrong became a director.

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THE name Findlay Securities has passed into stockbroking history after a brief but colourful existence, but it's reputation lingers like a sore for new owner Otto Buttula.

Yesterday the Australian Securities Exchange handed Findlay Securities one of the biggest fines seen for breaching market rules - $308,000 for more than 68 offences that date back to October 2007.

Buttula - best known for selling IWL toCommonwealth Bank for $370 million and netting Pratt family vehicle Thorney Investments $50 million on the way - bought listed Findlay Securities in May 2008.

If the IWL sale was the highlight of Buttula's career, buying Findlay and its associated baggage must rank among the low points.

Not long after its listing, Findlay was a sponsor of the 2007 Melbourne Cupcarnival, and took a marquee in the prestigious Birdcage enclosure at Flemington, where guests included Melbourne day trader Leo ''The Gun'' Khouri.

The Melbourne outpost of the listed broking firm was located on the same floor of the La Trobe Street office of Tom Karas, a financial services provider who famously was involved in the imbroglio over champion racehorse Pillar of Hercules.

In February 2008, the Australian Federal Police raided the Sydney offices of Findlay Securities over the broker's dealings with listed mining explorers Golden West and Fairstar Resources.

The AFP also raided the homes of former Findlay director Robin Armstrong and former trader Jeremy Slater.

ASIC last year banned Slater from providing financial services for seven years after an investigation found he had engaged in market manipulation, misleading and deceptive conduct and unauthorised discretionary trading.

Despite all that drama, Buttula took control of Findlay in late 2008.

By March last year more than 80 per cent of Findlay's 8500 clients had their accounts closed as part of a clean sweep of the business.


The 6900 closed accounts include those of some Melbourne underworld figures.

Buttula renamed the company InvestorFirst to better reflect the culture ''the company wishes to promote'', but, despite all his hard work cleaning out the company, Buttula has been left holding the bag. Although, given its past, some might consider $308,000 a small price to pay.

As part of a lengthy six-page rap sheet, the ASX Disciplinary Tribunal determined that Findlay Securities failed to settle transactions on time, engaged in unauthorised short-selling, failed to ''satisfy the risk-based capital requirements'' and engaged in ''inadequate reporting that amounted to unprofessional conduct''.

Some of the fines relate to the trades of Melbourne investor Giovanni Spagnolo, who is just the second person in Australian history to be charged for short-selling stock.

According to the corporate plod, in October 2007 Spagnolo sold shares and options that he did not own in companies including Rimfire Pacific Mining and QR Sciences Holdings. It is alleged that Spagnolo applied for shares and options in capital raisings by the companies, and agreed to sell the shares on the ASX before they were issued.


Those share trades were done through Findlay Securities, via the trading code Armstrong.

For those offences, Findlay was fined $30,000. For lodging inaccurate audited returns for two financial years, as well as breaching the minimum liquidity requirements required of a stockbroking firm, a further $100,000 fine was dished out by the ASX.

After determining that Findlay's conduct ''involved a substantial or consistent failure to reach reasonable standards of competence and diligence'', the tribunal handed out a $150,000 fine for unprofessional conduct.

''Conduct of this kind could affect the integrity of the ASX market and could undermine trust and confidence in the operation of the ASX market for other participants,'' stated the tribunal.

Buttula and InvestorFirst chief executive Brett Spork yesterday said they both hoped that the payment of the fine would finally put to rest Findlay's ghost.