Leading Irish spread-betting firm MarketSpreads has been instructed by the Central Bank to suspend trading immediately.
The Central Bank yesterday suspended the firm's licence to trade, citing "capital adequacy and audit opinion issues".
In an email to account holders, the company said it received an instruction from the bank at 4pm yesterday to suspend client trading. On foot of this, management took the decision to close all open positions, it added.
MarketSpreads was originally the Irish arm of international spread-betting operation WorldSpreads which is now under special administration in the UK following a dramatic collapse last month.
In its email, MarketSpreads insisted it remained “profitable and solvent”, and that all client funds were "properly segregated".
“We are in the process of closing down all client positions and will do so as fairly and efficiently as we possibly can,” it said.
The company unsuccessfully sought a High Court injunction yesterday against the Central Bank’s move to suspend it.
“We went to the High Court to at the very least achieve a stay on this completely unexpected bank instruction but the judge could not see anything unlawful with the bank’s actions and we are now forced to suspend client trading and close all open positions,” it said.
MarketSpreads said despite previously affirming that its client funds were "properly managed", the Central Bank had instructed it not to release any funds to clients until further notice.
The bank is due to receive an independent report on the company’s trading position from accountants Grant Thornton on Tuesday.
MarketSpreads bought the business from WorldSpreads in 2009 and renamed it, and have been a separate entity since then.
WorldSpreads, which is headquartered in Dublin, went into administration last month after it was found to have shortfall of €15.6 million of client money.
Its founder, Conor Foley, resigned as chief executive before the collapse.
The Central Bank yesterday suspended the firm's licence to trade, citing "capital adequacy and audit opinion issues".
In an email to account holders, the company said it received an instruction from the bank at 4pm yesterday to suspend client trading. On foot of this, management took the decision to close all open positions, it added.
MarketSpreads was originally the Irish arm of international spread-betting operation WorldSpreads which is now under special administration in the UK following a dramatic collapse last month.
In its email, MarketSpreads insisted it remained “profitable and solvent”, and that all client funds were "properly segregated".
“We are in the process of closing down all client positions and will do so as fairly and efficiently as we possibly can,” it said.
The company unsuccessfully sought a High Court injunction yesterday against the Central Bank’s move to suspend it.
“We went to the High Court to at the very least achieve a stay on this completely unexpected bank instruction but the judge could not see anything unlawful with the bank’s actions and we are now forced to suspend client trading and close all open positions,” it said.
MarketSpreads said despite previously affirming that its client funds were "properly managed", the Central Bank had instructed it not to release any funds to clients until further notice.
The bank is due to receive an independent report on the company’s trading position from accountants Grant Thornton on Tuesday.
MarketSpreads bought the business from WorldSpreads in 2009 and renamed it, and have been a separate entity since then.
WorldSpreads, which is headquartered in Dublin, went into administration last month after it was found to have shortfall of €15.6 million of client money.
Its founder, Conor Foley, resigned as chief executive before the collapse.
Anyone that was stupid enough to leave their money with them deserves to loose it.
ReplyDeleteWhy does that go for Marketspreads and not Worldspreads?
ReplyDelete