Financial Spread Betting | Betting Bible

Talks have been ongoing over the weekend and a deal is likely to be announced within the next 24 hours, it is understood.

Although the details are still being finalised, bankers say ETX is likely to have a particular interest in WorldSpreads client base and its technology platform.The news comes as WorldSpreads confirmed this morning that KPMG has been appointed as special administrators - the accountants will now make all business decisions at the firm while it is wound up. 

Following an internal investigation, the firm said on Friday that it was suddenly “unable” to assess its own finances following the discovery of “possible financial irregularities”.

Around 5000 customers of WorldSpreads are facing losses of £13 million after  the  beleaguered spread betting house today admitted to a “shortfall of client money”.

WorldSpreads believes that it owes clients £29.7 million but only has cash balances of £16.6 million.

The shares were suspended on Friday.

That move followed  the  abrupt departure of chief executive Conor Foley last week. Chief financial officer Niall O’Kelly has also gone. It is he at which WorldSpreads seems  to be pointing the finger, noting that the irregularities emerged within a day of his departure.

Chairman  Lindsay McNeile  had  previously  denied  there  was  anything problematic ongoing at the firm, denying rumours that had been sweeping the City for at least a week.

McNeile, an Eton-educated raconteur, said last week that Foley has moved on because he had other “entrepreneurial” interests to pursue.

The matter is bound to attract the further attention of the Financial Services Authority. The  regulator says customers should contact the special administrators on 0203 284 8829 for more information. There is considerable interest in the City at the identity of those on the WorldSpreads creditor list.

They are likely to include some big names from within the spread-betting community, a tight knit group that sees many clients have accounts with rivals firms.

Neither ETX nor WorldSpreads would comment on any discussions. For the rest of the spread betting industry this scandal will be viewed dimly.

Spread betting had a patchy reputation in the past, based on several cases that saw client money and firm money becoming jumbled. In recent years it has become far more respectable and has grown in size as more and more clients found it an attractive way to invest.