Melbourne-based Sonray Capital Markets group flops and accounts of its 3000 clients have been frozen.

The derivatives broker went into a trading halt yesterday after Ferrier Hodgson received appointment as the investigator late on Tuesday.

Although there has been no word as to how much money were frozen, it was believed that the clients were mostly from retail investors and retirees who owned superannuation funds.

Ferrier Hodgson would be investigating the cause of the collapse and hold consultations with the Australian Securities and Investments Commission over the findings of the issue.

A source who is familiar with the situation, said the firm had attempted to expand into equities and collaborated with Europe's Saxo Bank to launch a new online trading platform. However the plans failed as the company was short with cash flow.

Media reports also speculate that Sonray was negotiating with Saxo Bank for an equity injection or buy-out but did not push thorugh.

Sonray reported an excess of $10.5 million expenditure that outweighs $8.3 milllion in revenue and a $1.5 million loss during 2009 financial year.

Sonray made its debut in 2003 through securites and derivatives specialist Russel Johnson and his brother-in-law, Scott Murray.

According to the company website, Sonray specializes in online advisory services on global equities, futures, and foreign exchange.

Sonray claims to be one of the first companies in Australia to provide contracts for difference (CFDs). The service, which became widely known in recent years, was also the subject of regulatory concerns that would bring in unsophisticated investors.

Mr. Johnson was an adviser in global securities and derivatives for broking firms such as Merril Lynch and Bell Commodities before starting his company.

Mr. Murray, his brother-in-law and partner, was an adviser in trading futures and derivatives for Firmat and CMC Markets. He assumed the role of chief executive and was responsible for Sonray's big network of clients.