Administrators find £13m black hole in WorldSpreads accounts
Monday 19 March 2012
Customers of a spread betting firm are likely to be left seeking compensation after an estimated £13 million black hole in its accounts was revealed today.
WorldSpreads, which runs online and telephone trading services, was placed into administration over the weekend after "accounting irregularities" were found.
Administrators at KPMG said the group's 15,000 customers were owed £29.7 million but the group has only £16.6 million of cash, leaving them facing a large shortfall.
However, customers may be reimbursed up to £50,000 by the industry's Financial Services Compensation Scheme, depending on their circumstances.
On Wednesday, chief executive and co-founder Conor Foley resigned, two weeks after chief financial officer Niall O'Kelly stepped down following a profits warning.
Its shares were suspended from trading on the Alternative Investment Market on Friday.
Redundancies among the firm's 66 staff - most of whom are based in London - are likely as administrators wind down the business. WorldSpreads is based in London and its parent company is in Dublin.
The Financial Times reported that WorldSpreads mixed money from customers' accounts, which should have been segregated, with its own funds.
The industry's compensation scheme pays up to £50,000, mainly for individuals and small firms. But some of its clients, including other spread betting firms, are believed to be owed larger sums, raising the prospect of a lengthy legal struggle.
The Financial Services Authority said: "Clients should be aware that any shortfall in the client money accounts will impact the amount of money that can be returned."
- 1 Scarlett Johansson new band 'already hit with legal complaint' from another The Singles
- 2 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 3 What color is The Dress, white and gold or blue and black? An eyewitness gives a definitive answer
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Husband and wife die holding hands within hours of each other after 67 years of marriage
Mohammed Emwazi: Nine things we know about Isis militant 'Jihadi John'
What color is The Dress, white and gold or blue and black? An eyewitness gives a definitive answer
'Jihadi John': Mohammed Emwazi – from British computer programmer to Isis executioner
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
This is what it's like to be dead, according to a guy who died for a bit
iJobs Money & Business
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...
£22,000 - £23,000: Beverley James: Are you looking for the opportunity to work...