Johannesburg — INVESTORS who lost millions after the collapse of brokerage Dealstream may have a claim against the JSE, according to the provisional curator's affidavit which will be presented to the Pretoria High Court today.

The JSE may owe R233m to investors, Rand Merchant Bank (RMB) and shareholders after the demise of Dealstream in September.

JSE CE Russell Loubser was not available for comment yesterday.

Provisional curator Bernard Levenstein said the JSE might be liable because it knew in 2006 Dealstream CE Russel Leigh was giving clients misleading information about the JSE.

In March 2006, the stock exchange wrote to Dealstream saying that if its documentation was not amended the JSE would go to court. But no further action was taken. Two-and-a-half years later Dealstream blew up with investors still under the impression all their dealings were regulated by the JSE.

Since Dealstream went bust big names such as Investec and RMB have been implicated. Levenstein suggested a complete investigation into RMB and an investigation of "all role players".

Leigh, one of the central role players, has been in regular contact with Levenstein via e-mail from Israel, the country he fled to after Dealstream collapsed.

Levenstein found that Leigh transferred negative positions in his own account to that of his wife, Jeanne Leigh, and to Dealstream's unallocated account. Rival brokerage Global Trader fired Jeanne Leigh in 2003 after Global Trader's client database was found in her and Russel Leigh's possession.

Levenstein said Dealstream's client accounts should have had a total cash balance of R155,1m, but at the end of last month came to R16,1m, and fixed assets were worth about R352895.

It would appear the bulk of the funds went into shoring up Dealstream's margin calls with its clearing agent, RMB. "Leigh has withdrawn balances from the investor trust accounts arbitrarily without an underlying transaction by the specific investors," he said.

"My investigation revealed that most of the investor trust balances had been cleared to zero. There has been a gross abuse of client trust funds."

Although various shareholders have tried to distance themselves from Dealstream, Levenstein found the 50% owner of Dealstream, the Agril-IDC Venture Capital Fund, was held by the state-owned Industrial Development Corporation (75%), auditing firm Ernst & Young (17%) and Worldwide African Investment Holdings (8%) which boasts Phutuma Nhleko, CE of MTN, and Khaya Ngqula, CE of SAA, as directors.

Questions have been raised as to why Investec did not sound alarm bells when Leigh raided Dealstream's clients' Investec trust accounts. But Stephen Koseff, Investec CE, said his bank would not have picked this up because Dealstream had a mandate from its clients to move the money.

"We don't know if those were margin calls or stealing the money. It's not our responsibility because clients gave Dealstream a mandate," Koseff said.