03/19/2012 : ACCOUNTING IRREGULARITIES CLAIMED AT WORLDSPREADS (Update)
Company goes into administration with a GBP 13 million shortfall on client funds
News of the suspension of trading at Worldspreads has been followed by an FSA announcement that the company has been entered into the regulator’s special administration regime after accounting irregularities were discovered.
The rumour mill has it that the company failed to segregate clients monies from its own funds.
Worldspreads remaining directors said they believed that, as of the close of business on March 16, there was a shortfall of around GBP 13 million of client money, according to a Reuters news agency report.
The regulator said that depending on individual circumstances customers could have access to the FSA compensation scheme, through which investors' first GBP 50 000 may be retrieved. It is not clear whether the bill for any claims would fall on advisers.
Over the weekend the High Court in London appointed Jane Moriaty and Samantha Bewick of KPMG as joint special administrators, although the company was reportedly the auditor of the company's books.
Worldspreads is expected to formally declare its insolvency proceedings later today (Monday) in the absence of any rescue takeover bids by its competitors.
One of the UK's largest financial spread betting firms, Worldspreads was founded in Ireland at the turn of the millennium, going public in London seven years later.