Britain’s financial watchdog, the Financial Services Authority, is expected to draft City of London police into the investigation surrounding financial irregularities at Irish-founded spread-betting firm, Worldspreads, in the coming days.
Any criminal investigation would then run its course before the start of a regulatory probe.
The company, which was formed in Dublin in 2000 but sold its Irish business nine years later, went into administration on Monday, with KPMG being appointed by the High Court in London.
That development followed a turbulent week for the company, which saw its co-founder, Conor Foley, step down as chief executive, and then its shares suspended pending a study of its financial situation.
On Monday, it was reported that there is a shortfall of client money, at the company, of around £13m (€15.65m), outstanding gross amounts owed to clients of nearly £30m and total cash balances, on its books, of just £16.6m.
Mr Foley has since stated that his departure was “completely unrelated to these issues” and said he only learned of the financial problems on Friday.
KPMG said, yesterday, that it has made 52 Worldspreads staff redundant, with approximately 12 staff members being retained to help with the wind-down of the company.
The administrators said they have received expressions of interest from “several parties” concerning Worldspreads’ residual assets — such as software platforms, office equipment and computers — but said there will be no actual sale of the business or its client list.
The company has about 15,000 clients worldwide. However, few of these are thought to be based in Ireland, as MarketSpreads — the firm which took over Worldspreads’ Irish business in 2009 — now owns its client book here.
MarketSpreads is reported to have been ready to sue Worldspreads over the financial details of the Irish division presented at the time of the management buyout.
It has since deferred payment of the last €1.65m of its €11m takeover of the Irish business, but is now unlikely to spend money going after anything more.
In a brief statement yesterday, MarketSpreads said it has no connection with Worldspreads and has no financial exposure to the company.
Meanwhile, CMC Markets — the second-largest spread betting and online trading firm operating here — announced yesterday that it is closing its Dublin office and amalgamating its Irish business with its London-based operations.
The company, which opened its Dublin office four years ago, employing five people, said that the move was more to do with the fact that much of its Irish-based operations were already being carried out by London, than any cost-savings mechanism.
It said that the move will have no impact on its 300-strong Irish client base.
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