Spread Betting World Shaken By WorldSpreads Irregular Accounting

Published Sunday, April 08, 2012 - Online-Casinos.com

The spread betting world is complicated for most everyday punters but it becomes even more risky and less likely to get your attention if there are irregularities in the accounting. Worldspreads is a name that comes to mind when one considers the findings of a new executive team that discovered a problem with the books that amounted to allegations of accounting fraud. There was a swift reaction in the marketplace as the company abruptly halted trading on the London Exchange just recently.

It is alleged the company’s directors deliberately misled their clients. With revelations that there is a significant shortfall of funds in the company accounts has the clients up in arms over their losses. £13m is a substantial problem and the “market abuse,” takes things another level. Worldspreads did not say to its investors to cash out, because their scheme to inflate the share price had failed and the long bet had not materialized.

Those in the £100k bracket have established WorldSpreads Action Group to explore legal action against the firm’s directors, insurers and the auditors. The fraud was allegedly carried out over more than a year and WorldSpreads was supposed to be prohibited from offering financial advice to clients. Most former clients have been informed that the first £50k of their accounts being protected by the Financial Services Compensation Scheme. Anything above that amount, is to be treated as a preferred creditor during the actual liquidation of assets.

Back in March when the discovery of irregularities was made it came only two days after the abrupt resignation of founder Conor Foley, who announced his departure after 12 years as chief executive officer. Niall O’Kelly, financial director, left the company the same day. “It’s hit us with enormous force in a dark tunnel,” said Lindsay McNeile, chairman of Worldspreads.

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