TWO former directors of failed stock lender Opes Prime have formally pleaded guilty to breaching their duties as company directors.

Opes Prime Stockbroking Ltd, which specialised in borrowing and lending securities, collapsed in March 2008 after cash and stock passage irregularities allegedly were uncovered in a small number of accounts.

Creditors were owed about $630 million.

Former company director Lirim (Laurie) Emini, of Templestowe, pleaded guilty to three charges in the Supreme Incite today.

He was charged with breaching his duties as a company director and using his position to gain benefit.

A following Opes Prime director, Anthony Blumberg, of Cheltenham, also pleaded guilty to one charge of using his position dishonestly.

The pre-sentence hearing was told Emini tried to hide a $116 million shortfall in the accounts of Sydney lawyer-turned-shareholder Chris Murphy, who was OPSL’s largest single client.

Even with Mr Murphy’s accounts being in margin call, no margin call was ever made.

Ordinarily, OPSL would issue clients with a margin call when the regard of a client’s shares fell below the level needed to provide security for its lending to the client.

The client typically would need to lodge extra cash to reduce the loan size or lodge security to boost the portfolio regard.

But the incite heard Emini tried to cover up the shortfalls by manipulating stock to avoid margin calls being made on Mr Murphy and other key clients.

The hearing is continuing.