Conor Foley CEO of Worldspreads days before the collapse
From this mornings Telegraph – not pretty reading for the former ‘Directors’ of Worldspreads:-
The creditors of WorldSpreads are set to pursue the former directors and advisers to recoup some of the money from the failed spread betting company, which was placed into special administration in March.
WorldSpreads collapsed after informing the Financial Services Authority that it had only £16.6m of cash to repay £27.9m of client funds.
The Sunday Telegraph understands that administrators at KPMG have indicated to creditors that they would like permission to gather evidence and attempt to build a case against former members of the board.
It is believed that a meeting of the creditors committee sanctioned the request, with administrators Jane Moriarty and Samantha Bewick now involved in a fact-finding mission.
If it is thought a case can be brought, creditors will then need to sanction any specific legal action.
Past directors include chief executive Conor Foley, who was the company’s largest shareholder, and long-standing finance director Niall O’Kelly, both of whom left the company shortly before it was placed into administration.
The company, based in Dublin, was listed on the London Stock Exchange’s junior Aim market, and was placed into administration under rules put in place after the administration of Lehman Brothers’ European business.
KPMG has already begun looking at former wealthy clients, after it was revealed that debtors owed the company £2.5m.
A KPMG spokesman declined to comment.
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SBM Comment – As a client of Worldspreads who had in excess of six figures stolen from me by the Company, the revelation by the Telegraph that KPMG are set to sue is certainly welcome but was the least that could be expected.
This fraud has left an indelible stain on the industry and those complicit parties should not only be sued and followed to the ends of the earth but, in my opinion, languish in jail for a very long term. As for Ernst & Young’s role in this saga – I shall await the evidence disclosure before passing judgement here but in the words of the barrister retained to investigate this matter – “if there was no fraud, then E&Y must have been remiss in their duties and are therefore culpable or, in the alternate, if there was a fraud then the Directors are of course responsible – there can only be one of 2 explanations”.
I guess an uncomfortable nights sleep for the ex Directors. Good.