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Spreadbetting firm placed in special administration by FSA

FSA has placed spreadbetting firm Worldspreads into special administration, the third firm to be targeted under the new powers.

Trading in Worldspreads’ parent was suspended by the Alternative Investment Market last week, pending an announcement, which revealed accounting irregularities.

The regulator claims the accounting irregularities made it unable to continue in business.

KPMG’s Jane Moriarty and Samantha Bewick have been appointed special administrators by the City regulator.

The administrators will review client cash holdings positions and “return as much cash as soon as practicable”.

Worldspreads is the third firm to be placed under the regime, following similar actions by the FSA towards Pritchard Stockbrokers and MF Global.

The Financial Services Compensation Scheme may be called upon if any losses are found. This month, the FSCS told investment intermediaries that they would face an interim levy of £60m to fund customer compensation claims, including the failure of MF Global.

It is not yet known which sub-class will be liable for compensation costs related to Worldspreads.

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.”

The FSA is only permitted to place firms in special administration after consulting HM Treasury and the Bank of England.

Customers have been urged to contact the joint administrators for more information on 0203 284 8829.

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  1. Just finished reading about Mark Hoban’s comments about trying and failing to think of a better alternative than the present FSCS funding and then read this beauty! If fee based financial planners and protection specialist advisers have to chip in for spreadbetting failures, perhaps all accountants and solicitors and consultancy firms, like Mark’s old one perhaps, could be asked to chip in a bit. They have much closer connections to the spreadbetting world than we do.

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