KPMG, administrator of collapsed broking firm BBY, says a great deal more money is missing from client accounts.

It follows a damning report on BBY from late last week, which said the firm may have been insolvent a year ago.

If it is the case, it would be a serious breach of the Corporations Act.

BBY collapsed last month after declaring insolvency, which left hundreds of clients millions of dollars out of pocket and their funds frozen.

It forced the closure of options trades for hundreds of clients, leading to as yet unknown losses.

KPMG now says there could be a shortfall of $16 million from client trust accounts, a revision on the $10 million figures it previously estimated.

In a new report, administrators Stephen Vaughan and Ian Hall warn the figures could get worse.

“These numbers may change if further information comes to light as a result of ongoing investigations,” they cautioned.

The issue has been referred to ASIC.

“It is the role of ASIC to determine what if any further action may be warranted in relation to any possible breaches of the Corporations Act,” KPMG’s report said.

If the regulator finds that dishonesty is a factor in insolvent trading, such as allowing the company to rack up more debt, the director would face fines of up to $220,000 and/or imprisonment for up to five years.

The administrators say BBY also provided “misleading information” to its lender, in the hope of securing more funds.

They are also investigating the possibility that it was misusing client trust funds as early as June last year.

KPMG says it is unlikely that unsecured creditors will get much of their money back, estimating a return between “zero and 24 cents in the dollar”.

In other findings, they say the company's financial records “were not up to standard”.

KPMG’s report gives a biting summary of the lead-up to the company’s collapse.

“Poor governance and an inadequate risk management framework, inadequate capital, trading losses and an inability of management to foreshadow and appropriately respond to a number of adverse events and margin calls,” it states.

Legal action is being considered by clients and creditors, with a second creditors meeting to be held on June 22.