WorldSpreads calls in administrators
Administrators appointed to investigate £13m in missing player funds.
WorldSpreads was forced to call in administrators KPMG yesterday to investigate “accounting irregularities” following the suspension of the group’s shares from trading on the London Stock Exchange’s Alternative investment Market (AIM) and the Irish Enterprise Securities Market (ESM) on Friday.
Thousands of the collpased company’s customers could now lose their funds after the Financial Services Authority (FSA) last night warned there could be a “shortfall in the [company’s] client money accounts” but said it will “return as much cash as possible directly to each client as soon as practicable”, according to City A.M newspaper.
Jane Moriarty and Samantha Bewick of KPMG have been appointed joint special administrators of the financial spread betting operator following a special administration order, and will take over the management of the company until the order is lifted.
Trading of the group’s shares was suspended on Friday after “possible financial irregularities” were uncovered after a review of the group’s financial position. In a statement released by the group by the group this morning, the company revealed that it had identified a £13m shortfall in client funds, with £29.7m owed to customers. Currently, however, the group has a cash balance of £16.6m.
The suspension follows CEO Conor Foley’s sudden resignation on Wednesday last week, with CFO Niall O’Kelly resigning at the end of February after WorldSpreads announced that it expected to make a loss for the year ending 31 March 2012.
The spread betting business is the third firm to enter into the FSA’s special administration regime set up last year to ease out collapsed companies with minimal disruption to market infrastructure.