Worldspreads suspends shares?

[NVP]

I can see your point but surely even the FSA / FOS are going to smell a rat if many different clients get in touch all telling the same story?

It would also be very hard to keep £13m of liabilities 'under wraps' in this manner without it coming out on to forums like T2W. It certainly is an interesting theory though. The truth is however that the accountants recognised that WS clients had funds placed with the firm to the tune of almost £30m. Keeping disputed pay-outs out of the equation would reduce their client liability but it wouldn't explain how they were able to demonstrate to E&Y that they were correctly holding £30m in a segregated client funds account when in fact they had no where near that amount in client funds?

take it from a qualified accountant with 30 years experience......Sh*t happens everywhere.......just depends how much is around and where it can be hidden

and if the auditor needs the business.....

N

 

[DJS1]

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Hi iBet Financials,

Love the concept, actually looked at your service myself, but recommend any traders to read the fine print. Where are iBet Financials actually licensed....your operating in the UK so obviously regulated by FSA but what financial services license do you have??

This will determine the security of client funds....which coincidently on your website confirms that client funds WILL NOT BE SEGREGATED!!! Think your preaching to the wrong crowd posting here on a WorldSpreads thread where security of client funds is absolutely of utmost importance!!!

http://www.kytegroup.com/support/pdf/ibet.pdf

 

[stevespray]

take it from a qualified accountant with 30 years experience......Sh*t happens everywhere.......just depends how much is around and where it can be hidden

and if the auditor needs the business.....

N

That's fair comment and I see where you're coming from. However, you can hide sh*t as and when you please and it could be that no one spots it for years on end but, when a firm goes tits up everything changes as things come under a far more intense spotlight. Trust Documents for example, the ones showing balances in the clients segregated account!

If I was in the police the Trust Documents would be the first things that I'd look at. These could well point the finger.

 

[TDog]

take it from a qualified accountant with 30 years experience......Sh*t happens everywhere.......just depends how much is around and where it can be hidden

and if the auditor needs the business.....

N

I totally agree. Let's not forget we're talking about E&Y here, who also brought you such auditing successes as Lehman Brothers and Anglo Irish and Torex

big4gossip - WorldSpreads Shares supsended

If this fraud/client money issue has just been picked up in the last couple of weeks then I would imagine it has been picked up as part of the year end audit, normally the auditors will go in twice a year on a company this size. Once between Jan and March and once between July and Sept for an interim audit.

The interim audit is deemed less important and for a company this size they would probably send a newly qualified accountant who may not have been experienced enough to pick up the issue then. So it's been left to the year end audit where they actually have to do their job and ask some questions like "what the f*** is this £13m hole in your balance sheet".

Basically I'm ranting because I think E&Y should be held financially accountable for this. But they won't, they'll end up with a £50k fine which is less than what some traders on this board will lose

 

[scose-no-doubt]

All the auditors do is check the controls procedures. If the controls are deemed to e working then accurate numbers should be produced. That's the auditors job. A lot of people have this erroneous idea that auditors are expected to vet the numbers or something when it's really not the case. The accuracy of the financial statements et al is completely the responsibility of the client.

Should auditors do more to detect malpractice and/or illicit activities? That's another issue altogether.

 

[TDog]

You sound like an E&Y auditor!

 

[Mornington Crescent]

whatever happened to "True and Fair" ?

used to be the over riding principle

 

[stevespray]

Regardless of how you dress it up, the accountants were mislead as to the state of the firms true financial health. In turn this is passed on to the investors / clients through the released accounts. The directors are ultimately responsible for this. If a firm is being run correctly and has a healthy balance sheet then there is no need to mislead your accountants. This means that at some point there was willfull deceit by one or more persons.

In the UK it is a criminal offence to allow a business to carry on trading whilst insolvent. The law makes it clear that client assets (in the case of retail clients) are not part of the firms assets but remain the property of the client. In this particular case the firm appear to have been stuck with a dilemma, whether to declare insolvency or dip into the clients own money to carry on running the business on a day to day basis. It will be interesting to find out if the directors carried on paying themselves (using the clients money) when the firms own money ran out. If that turns out to be the case then surely the knives really will be out??

 

[fibbinstarchi]

I don't think l helped Worldspreads as I was pulling out 10k a day on average, glad I took my money and ran, left about £800 in there but won't Chase it, I think they need it more than me.

 

[MoonRocket]

I don't think l helped Worldspreads as I was pulling out 10k a day on average, glad I took my money and ran, left about £800 in there but won't Chase it, I think they need it more than me.

Did they ever try to stop you or make it difficult for you to trade?

 

[Ross Spur]

Did they ever try to stop you or make it difficult for you to trade?

I find it hard to believe they let anyone take £10k in a day more than once, as the platform seemed to be programmed to nobble anyone who made even fifty quid with short-term trades.

 

[The Leopard]

I don't think l helped Worldspreads as I was pulling out 10k a day on average, glad I took my money and ran, left about £800 in there but won't Chase it, I think they need it more than me.

Say 250 trading days a year, you were taking £2.5 million off them per annum on average?

 

[top trader]

He forgot his decimal point.........lol

 

[The Leopard]

He forgot his decimal point.........lol

Or perhaps his account was in Zim Dollars? Or Confederate money?

 

[the hare]

All the auditors do is check the controls procedures.

I would assume that somewhere there would be a report that showed:

a) total cash/assets scattered across various bank accounts on behalf of clients
b) total value of clients trading accounts (closed positions)
c) total snapshot value of clients trading accounts (open posiions) when the report was generated

I would probably want to see a - (b+c) being somewhere around zero

In reality, I'm sure its a bit more complex than that, but there's no real control procedure if something so basic is lacking. Id probably also want to see some sort of procedure that specifies what should occur when a - (b+c) was significantly deviated from zero. I'd also want to be sure that someone was looking at that report relatively frequently, and understood the practical implications of 50% of the clients funds vanishing !

What would the auditors actually do in the UK if such basic procedures where not in place ? presumably they'd sign off on the accounts but note the lack of adequate financial controls in their report ?

I also assume that the auditors will be acting in the interests of the companies shareholders, which isnt sometimes the best interests of the companies clients ?

 

[scose-no-doubt]

Well you get different audit opinions and you can emphasise areas of concern in the audit report.

Looking at your bank example, you have to remember that the auditor is just going in to check what's where. If the management are involved in illicit dealings then they're going to pull the wool over their eyes. It's not that hard to put money in a bank account and lie about where it came from. The fact that the CFO and CEO have both left speaks volumes imo.

 

[tar]

Worldspreads Ltd - update for consumers

19th March 2012

The Financial Services Authority (FSA) has announced that Worldspreads Ltd has entered the special administration regime. The Financial Services Compensation Scheme (FSCS) is aware of the situation with the firm and is working with the administrators, KPMG, to understand how the firm’s failure might affect consumers and the role FSCS might play.

The FSCS protects consumers who lose money when authorised financial services firms go bust. It is liaising with the administrators and the FSA to get the information and data it needs to analyse potential claims under its rules.

Customers of the firm should contact the administrators for more information on the failure of the company and what it means for them. The number is 020 3284 8829.

FSCS Chief Executive Mark Neale says “We are working closely with the administrators and the FSA to understand the scale of consumer losses and potential claims for the FSCS. We will do all we can to provide certainty to customers of the firm as soon as possible. There is no need to contact FSCS at this time. Please direct any enquiries to the administrator. We will publish an update on our website as soon as we are able to provide more information on the potential claims and the process we will use to settle them.”

Since 2001, FSCS has protected more than 4.5m people and paid out more than £26bn in compensation to UK consumers.


FSCS > Worldspreads Ltd - update for consumers

 

[fibbinstarchi]

I find it hard to believe they let anyone take £10k in a day more than once, as the platform seemed to be programmed to nobble anyone who made even fifty quid with short-term trades.

Yes they did like to skim a few pips but you simply adjust, I never really had too much trouble with them, I expect they were shadowing my trades. Am currently eating into CMCs bottom line.

 

[scose-no-doubt]

statement or gtfo... it's photo-shopped ..etcetera

 

[Ross Spur]

Yes they did like to skim a few pips but you simply adjust, I never really had too much trouble with them, I expect they were shadowing my trades. Am currently eating into CMCs bottom line.

Surely if they were shadowing your trades they would have had at least a trillion in the bank and would never have gone bust. Can't imagine CMC being any more accommodating to winners, so what way are you trading?