A spokesman for a group representing some clients of the failed Cork stockbroking firm W & R Morrogh has said they are "gobsmacked" by the size of the costs that have been incurred by receiver, Mr Tom Grace.

The High Court heard on Thursday that the receiver's costs could be as much as €5.7 million. It granted permission for Mr Grace to sell such shares held by Morrogh as were necessary to pay his costs, fees and expenses.

"We are quite shocked that the total should come to anything like more than €5 million," the spokesman said. "We always assumed that the cost would come to between €2.5 million and €3 million."

The court heard on Wednesday that Mr Grace's fees and expenses were likely to be €3.26 million. A further €2.24 million is believed to have been incurred in legal fees.

The spokesman said that the legal fees were connected to court hearings where Mr Grace had gone to the courts seeking directions. However, he said, it should not be investors that had to pay for any interpretation of the law that was required.

He said the Oireachtas had passed a law (the Investor Compensation Act) designed to protect investors, but investors were now having to pay for the interpretation of that Act by the courts. "Investors here in Cork are furious that this has been allowed to occur... An Act passed by the Oireachtas for the protection of investors has been used to their disadvantage."

He said the focus of the clients' anger was the Irish Financial Services Regulatory Authority (IFSRA). He said he believed it should have paid for the cost of the High Court hearings. He also said it was the group's legal advice that Mr Grace's powers were restricted to the assets of the firm W & R Morrogh and do not extend to the assets of the firm's clients.

The group represents about 40-50 investors, 30 of whom would be above the €20,000 upper threshold for restitution under the investors' compensation scheme established by the Act. They would have an average investment with Morrogh of approximately €70,000, he said.

A spokeswoman for IFSRA said there was no legal precedent to the case. She said the Department of Finance had set up a working group to look at the issue of the winding up of investment firms, arising from the Morrogh case, and IFSRA was represented on the group.

The action group represents a small proportion of the overall number of investors affected by the collapse of the firm. The shareholders were among the assets controlled by Mr Grace because some clients had had their assets misappropriated, one source said.

The court was told on Wednesday that it was hoped that shareholders whose claims against the company were admissible would get their entitlements before December. Mr Grace believed there might be 3,000 admissible claims.

He said Morrogh's only assets were €85,000 in AIB and computers and equipment worth €1,000.