FSA to call in police over WorldSpreads
Regulatory body to formally request a police investigation into financial irregularities.
City regulator the Financial Services Authority (FSA) is expected to call in the police over £13m in missing WorldSpreads customer funds, after special administrators were appointed yesterday.
The FSA has already been in contact with the police after financial irregularities were discovered after a review of the spread betting operator’s finances, The Guardian reports, and is now expected to make a formal request for the police to investigate the firm.
Yesterday WorldSpreads announced that special joint administrators Jane Moriarty and Samantha Bewick of KPMG had been appointed, revealing that the company had a cash balance of £16.6m, with a total of £29.7m owed to customers, meaning £13m was unaccounted for.
This discovery had led to the suspension of WorldSpreads shares trading on London’s Alternative Investment Market and the Irish Enterprise Securities Market on Friday.
According to the FSA, the administrators have the responsibility to “rescue the company as a going concern or wind it up in the best interests of its creditors,” as well as “as much cash as possible directly to each client as soon as practicable.”
The Guardian claims that the administrators are more likely to wind up the company, with its directors, including Conor Foley, who resigned suddenly last week, likely to be investigated.
Fellow financial spread betting operators IG Group and London Capital Group both released statements distancing themselves from WorldSpreads, saying:
“The Company has no financial exposure to Worldspreads and no commercial contracts of any nature with Worldspreads.”