Author Paul Holmes
The speed and professionalism with which the Worldspreads debacle has been handled by the UK governing authorities and the appointed receivers and administrators should serve as a standard and example for other countries’ official governing bodies to abide by. Whilst the overall sums involved are relative ‘small beer’, when compared to the October collapse of MF Global and the July collapse of PFG Best, the UK rescue apparatus would have sprung into action had a financial entity far larger than Worldspreads collapsed. In short had a huge player in the UK financial spread betting space collapsed the procedure would have been identical, a procedure not evident in the USA.
Jane Moriarty and Samantha Bewick of KPMG were appointed by the High Court as joint special administrators of Worldspreads Ltd, the UK based spread betting business, late on Sunday 18th March 2012. Worldspreads Limited is a wholly owned subsidiary of Worldspreads plc, a company incorporated in Dublin, Ireland.
Both the UK FSA, and the semi-autonomous FSCS (financial services compensation scheme) immediately took control indirectly arresting the public relations damage upon the spread betting firm’s collapse in March and to ensure that all clients involved were immediately instructed that they’d be compensated up to the guaranteed levels of £80,000. KPMG actually took the proactive initiative and contacted clients first in order to control the flow of queries.
The communication from the receivers KPMG has been both transparent and consistent since March. That level of communication has now reached the end stage as KPMG have begun to communicate with ex Worldspreads’ customers that payment is now imminent.
A protest blog, http://worldspreadsheist.blogspot.co.uk/ is reporting that written communication, quoting the levels of payment due from the receivers, is being distributed to clients. This follows the recent communiqués from KPMG;
Updates from FSCS
26th July 2012
“FSCS has begun making compensation payments to WorldSpreads clients where their application form has been returned to FSCS and their balance has been agreed with the Joint Special Administrators.
“If you have not received an email from FSCS containing their application form, and you wish to make a claim for compensation, please contact FSCS on freephone 0800 678 1100 or 0207 741 4100 to request an application form be posted to you.”
11th July 2012
“FSCS have now sent application forms to WorldSpreads clients that have been identified as having a likely claim for compensation. Please remember to check your spam filter to ensure you receive the application form.
“In some instances, where client balances are very small a form has not been sent, however
clients can request an application form for completion should they wish to make a claim.”
The handling on this issue couldn’t be in starker contrast to the appalling handling USA clients have received at the hands of the administrators of the affairs of MF Global and PFGBest whose clients are still very much in the dark as to how their investments may be recovered. The deafening silence is shocking and the coverage in the USA mainstream media, after the scandal lost its ‘shock breaking anchor news appeal’ in the mainstream, has been non-existent. It would appear that the USA clients are very much on their own.
It’s not all fair in the collapse of Worldspreads, undoubtedly there will be clients who will have had greater sums than that covered by the £80,000 FSCS limit, who will not enjoy full compensation and it could be only small comfort if these clients only receive a small percentage of their funds returned. However, what has been demonstrated is efficiency, probity and indeed a sense of fair play and the latter cannot be underestimated at a time when the faith in financial institutions is still at a low ebb, particularly amongst the general public investment community.