Who says you don’t kick a dog when it’s down? Hedge funds and other investors in Australia’s beleaguered stock market are doing just that. Local media are awash with tales of “shorting and distorting”; rumours are running riot and directors who lend their own stock on margin are considered fair game.

Australia is not alone in grappling with possible market manipulation – just ask UK retail bank HBOS – but repeated problems highlight weaknesses in the regulatory framework. Transparency is one. The collapse of Opes Prime, a margin lending and client broking firm, has caused havoc in large part because of its unusual model. Rather than simply holding clients’ shares as collateral, Opes used sale and repurchase agreements to in effect acquire the shares. Many of Opes’ clients say they were unaware of this arrangement, which – now the firm is in receivership – has pushed big parcels of shares on to the market.