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WorldSpreads appoint KPMG as administrators

WorldSpreads go into administration. KPMG (also administrators on MF Global) are appointed. A statement from the company released at 07:00 19/03/2012 read:

"Following the suspension of the Company's shares from trading on Friday, 16 March 2012, Jane Moriarty and Samantha Bewick of KPMG LLP were appointed as joint special administrators of WorldSpreads Limited Sunday, 18 March 2012 pursuant to a special administration order of the Court.  Whilst the order remains in force the affairs, business and property of WorldSpreads Limited will be managed by the joint special administrators.

As a result of further investigation, the board of directors believe that as at close of business on Friday, 16 March 2012 there was a shortfall of client money at WorldSpreads Limited of approximately £13 million and that gross amounts owed to clients are approximately £29.7 million whereas the total cash balances available to the company are approximately £16.6 million." 

 

WorldSpreads - KPMG contact details

If you are a customer of WorldSpreads and have questions over the recoverability of your funds you should contact 0203 284 8829. Rather ominously for WorldSpreads' customers, the KPMG press release stated the following:

"Due to the accounting irregularities that have been discovered, it is likely that there will be a shortfall to clients.  One of the immediate priorities of the special administrators will be to investigate and attempt to reconcile all client positions in order to establish the extent of the shortfall.  The special administrators will make their first report on the likely outcome for creditors within 10 weeks from their appointment, in line with statutory requirements."

KPMG also clarified that "Clients with any open positions will have their position closed out as at the close of the markets on Friday 16th March 2012."

For those of you worried about getting your money back do not read this blog by some MF Global account holders, they aren't too polite about KPMG either.

Read the latest on the KPMG WorldSpreads administration

 

WorldSpreads & the FSCS

The FSCS website stated this morning:

"The Financial Services Authority (FSA) has announced that Worldspreads Ltd has entered the special administration regime. The Financial Services Compensation Scheme (FSCS) is aware of the situation with the firm and is working with the administrators, KPMG, to understand how the firm’s failure might affect consumers and the role FSCS might play.

The FSCS protects consumers who lose money when authorised financial services firms go bust. It is liaising with the administrators and the FSA to get the information and data it needs to analyse potential claims under its rules.

Customers of the firm should contact the administrators for more information on the failure of the company and what it means for them. The number is 020 3284 8829.

FSCS Chief Executive Mark Neale says “We are working closely with the administrators and the FSA to understand the scale of consumer losses and potential claims for the FSCS. We will do all we can to provide certainty to customers of the firm as soon as possible. There is no need to contact FSCS at this time. Please direct any enquiries to the administrator. We will publish an update on our website as soon as we are able to provide more information on the potential claims and the process we will use to settle them.”

Since 2001, FSCS has protected more than 4.5m people and paid out more than £26bn in compensation to UK consumers."

 

By our maths, the shortfall in client money looks to be close to 60%, therefore consumers owed more than the £50k FSCS threshold, they could be looking at an equivalent haircut on their funds. Not happy reading for clients or their 66 employees.

 

 

 

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