As if Australia’s financial regulators weren’t damaged enough, today we’ve got the spectre of underworld strongman Mick Gatto brazenly parading for the media as an alternative debt collector for Opes Prime victims.

Given the woeful record of ASIC and the ASX, you almost can’t blame the hapless Opes clients for hiring Gatto.

The Age splashed with the story, it made AM, 774 ABC Melbourne’s Jon Faine led with it at 8.30am and TV crews door-stopped the swaggering Gatto as he and two burly associates boarded a plane to Singapore promising to bring back swags of Opes booty.

If it wasn’t so brazen, you would laugh, but even Alan Kohler is now speculating on Business Spectator that ousted Opes CEO Laurie Emini jiggled those six accounts due to fear for his safety.

As the 1200 Opes Prime victims come to terms with the brutal efficiency of bank workout teams, Gatto is offering an alternative method to the rule of law and legal process. Surely this sort of stuff was only meant to happen in places like Russia?

Australia’s construction industry and ALP-affiliated unions have long accommodated the likes of Gatto. Even the Nick Greiner-chaired Baulderstone Hornibrook hired him to negotiate a deal with ETU heavy Dean Mighell back in 2000.

However, rather than fear, I suspect it was greed and personal conflicts of interest that drove Emini and fellow Opes director Julian Smith, who we’re now told was also allegedly involved in the irregularities.

Emini’s lawyer has already taken issue with claims that he was connected to Tony Mokbel’s associates. A lender of last resort like Opes wasn’t discerning about its clientele. If you pledged shares, no matter how illiquid or dubious, ANZ and Merrill Lynch would include you in their jumbo loan.

Emini wouldn’t have known the vast majority of these clients, although the activities of his investment vehicle Hawkwood is a different story.

This is where the role of Sydney criminal lawyer Chris Murphy gets very interesting given that he was the major investment partner of Smith and Emini through Hawkwood.

Meanwhile, ANZ and Merrill Lynch need to be very careful about reputational damage. Robert Gottliebsen has today warned that Opes is shaping up to be ANZ’s equivalent of the Westpac Letters debacle.

ANZ made a disastrous mistake in failing to disclose all the shareholdings and communicate with the victims before undertaking this fire sale.

Merrill Lynch will undoubtedly face big claims for the way it dumped its 30% stake in Singapore-listed Jade Technologies to a bunch of investors who thought a takeover bid from President Anthony Soh remained on track.

Merrill never disclosed it had inherited Soh’s shares and Bloomberg reports that the stock plunged 70% to 6.5c yesterday – meaning the new investors who took Merrill’s 295.5 million Opes-pledged shares have dropped more than $30 million.

Maybe Mick Gatto is heading to see the Merrill Lynch regional boss Rob Stewart in Singapore.

This whole fiasco is extraordinarily damaging for the reputation of our financial markets. Bring on the Royal Commission.