If you have lost less than 70K --We need to take action

Dear all,

I am in as much shock as you are about how this particular creditors meeting went. I am putting together a case for the monies less than 70K to be recovered without any further delay.
I too do not understand how RBS can make a claim on funds that are illegally transferred from the clients to the company’s accounts. Personally this has come to a stage where we will be taking legal action.
At current one of the priorities should be for the fscs to return the compensation up to 50k to as many clients as possible and this is more than 70% of the clients. Why not put their minds at rest ?
I will draw up a petition and write to the authorities on your behalf
Please email me in the following format :
Name :
Email  Address:
Approx Amount lost:
I will compile a full report and send this of in the best possible manner.
If you do not wish to disclose your name please just send me your Worldspreads Account Number

THERE IS NO REASON AT ALL THAT THE 70% OF THE CLIENTS SHOULD SUFFER ANY FURTHER DELAY.
I will take this all the way to the media and show them how inconsiderate the schemes are in todays world.

Kind Regards
Rav
nshah10@hotmail.com

The administrators hope to begin payouts to creditors in September, but warned that the process could be held up further.

ALMOST ALL 15,000 clients of collapsed financial spread-betting firm Worldspreads are covered by a compensation scheme operated by its UK regulator.
The Irish-headquartered Worldspreads plc group collapsed in March when the board discovered a £13 million (€16.15 million) shortfall in client funds in its main operating business, London-based Worldspreads Ltd. The company owed its clients £29.7 million but had just £16.6 million to pay them.
Yesterday, the UK financial services authority confirmed that almost all Worldspreads’ 15,000 clients qualified for a statutory compensation scheme established to protect customers of financial services firms.
The financial services compensation scheme covers losses up to £50,000.
Worldspreads owed about 80 clients more than £50,000. In their case, the compensation scheme will pay them £50,000, and they will be able to recover a portion of the balance from a pool established by the special administrators who took over the company in March.
The pool will be established from the company’s remaining resources and those clients will be repaid on a pro-rata basis. In other words, if the pool covers 50 per cent of the company’s liabilities, they will be paid 50 per cent of the figure due to them above £50,000.

ETX Capital is poised to complete a deal that will rescue some of the wreckage from the collapse of spread-betting rival WorldSpreads.

The City firm considered buying the entire business at first but backed away after finding the losses at WorldSpreads too onerous to make a deal viable.
WorldSpreads collapsed in March after uncovering “financial irregularities” that left its customers facing losses of £13 million.
ETX is now poised to take control of the Greek, Spanish and Danish arms of WorldSpreads, profitable concerns said to be free of the investigation that is focussed on the London business.
It is expected to get FSA backing soon and could confirm the plans this week.
The deal will save a small number of jobs.
More than 60% of WorldSpreads’ revenues came from overseas. ETX itself has already expanded successfully into Germany and South Africa.
Those close to the process say ETX could have taken over WorldSpreads for a nominal £1 if it had agreed to make client positions good.
It is likely that both the Financial Services Authority and administrators KPMG would have backed such a deal. But the scope of the losses made this hard to justify, say those close to the process.
ETX also made an offer to buy the client base. However, World Spreads’ own terms and conditions with its clients prevented the transfer of client details to another provider. Its client list included some big names in the world of spread betting, including Simon Cawkwell, the self-styled "Evil Knievil" investor.
WorldSpreads says it owes clients £29.7 million but had cash balances of only £16.6 million.
Clients can expect to recover the first £50,000 of money they had on account under the regulatory compensation scheme, but the rest will be lost.
Chief executive Conor Foley left the company just before the losses were unveiled saying he had other “entrepreneurial” interests to pursue.

Maloney to investigate Worldspreads collapse

ACCOUNTANT GEORGE Maloney is to investigate the collapse of spread trading group Worldspreads, after being appointed liquidator to two of its key companies yesterday.
Worldspreads collapsed dramatically in March when its board discovered a €15.6 million-plus shortfall in client funds.
A creditors’ meeting in Dublin yesterday appointed insolvency specialist George Maloney, of Baker Tilly Ryan Glennon, to Worldspreads Group plc and Worldspreads International Ltd.
Following the meeting, Mr Maloney confirmed he will be carrying out an investigation into the circumstances surrounding the demise of both companies. His appointment means that the spread trading group’s collapse is now the subject of two investigations in two different jurisdictions.
Shortly after the collapse in March, the UK authorities appointed Jane Moriarty and Samantha Bewick of KPMG as special administrators to Worldspreads Ltd, which was based in London and played a central role in the group’s operations.
Part of their brief is to investigate the directors’ conduct and the circumstances surrounding the collapse of the business.
Mr Maloney said yesterday that he would be communicating with the special administrators shortly.
The two investigations are likely to feed into each other as it is understood that there were substantial transactions between various companies in the group.
Worldspreads chairman Lindsay McNeile attended yesterday’s meeting. He said afterwards that, on legal advice and to avoid any risk of prejudice to any investigations, he declined to answer any substantive questions. He made no comment following the meeting.
Former chief executive Conor Foley also attended. He did not issue a statement afterwards.
The board discovered the £13 million shortfall in Worldspreads Ltd in mid-March. The company owed clients £29.7 million, but had just £16.6 million to pay them.
The shortfall emerged as the board was preparing the ground for incoming interim chief executive Roger Hynes.
Mr Foley had resigned as chief executive days earlier to pursue other interests. Finance director Niall O’Kelly left the group in February.
Mr Foley had an 18 per cent stake in the group. In March, both he and the board said that his resignation had nothing to do with the crisis that unfolded following his departure.
He and Mr O’Kelly helped found the business in Dublin in 2000. It floated on the Irish and London stock exchanges seven years later. It spun off its Irish business and moved operations to London to focus on expanding in the British and European markets.

Worldspreads special administrators publish first creditors’ report

The special administrators of Worldspreads have today published the first creditors’ report, in accordance with their statutory obligations. 

Jane Moriarty, restructuring partner at KPMG and joint special administrator, said: “Our priority has been to analyse the company’s records so that we can agree the balances, which is an important first step in starting to return money to clients.  We have now issued around 18,000 statements to clients, and to date have agreed approximately two thirds of the client creditors’ balances.

“We have commenced our review into the reasons for the company’s failure and have, to date, taken possession of around 24 terabytes of data (this is equivalent to 10 billion A4 pages and is larger than The Library of Congress which has 20TB).  While we are able to indicate high level data around funds collected and funds owed, it will be some time before an exact position on the return can be given.  A broad guide at the moment suggests a return to client creditors of 30-35p in the £1.”

Key facts from the creditors’ report:

• Overall financials: the special administrators have identified approximately £30m in client claims and have found around £5m in segregated accounts and £11m in house accounts; 

• All Worldspreads’ retail clients are currently thought to hold segregated status and are therefore able to claim against the segregated pool.  As there will be a shortfall in money owed, the clients will then have an unsecured claim against the estate;

• The special administrators are working closely with the Financial Services Compensation Scheme (FSCS) to establish eligibility for compensation and confirm client statements so the FSCS can finalise its claims process and pay compensation to eligible customers under its rules. The FSCS will only use agreed balances to determine compensation amounts;

• All, but approximately 90 Worldspreads’ clients, had accounts worth less than £50,000;

• Once the FSCS has agreed to compensate a client, they will then take on that client’s claim against the estate;

• While the Special Administration Regime stipulates that individual client addresses should be redacted from the creditors’ report, the special administrators were granted an order by the court to redact all client details (including names) because the company’s records did not distinguish between corporate and individual clients and the administrative burden of distinguishing the two from thousands of records would have proved disproportionately expensive;

• Non-client, creditor details are available in the report (as set out in the legislation);

• In accordance with their statutory obligations, the special administrators are also investigating the conduct of the directors in the run up to the collapse of Worldspreads.  The report on this investigation is confidential and will be filed with the Department for Business, Innovation and Skills;

• Special administrators’ fees to date are approximately £900,000;

• The next update on the special administrators’ progress will be made at the creditors’ meeting on 23rd May 2012.

Special Administrators’ proposals and initial meeting of creditors and clients 

A meeting of creditors and clients (pursuant to paragraph 51 of Schedule B1 of the Insolvency Act 1986) of WorldSpreads Limited will be held at the Methodist Central Hall, Storey's Gate, London, SW1H 9NH, United Kingdom on 23 May 2012 at 11:00am, to consider the Joint Special Administrators’ Proposals and to consider establishing a creditors’ committee comprising representatives of creditors and clients.

• The notice of the meeting can be found here

In view of the large number of creditors and clients, in accordance with Rule 297 of The Investment Bank Special Administration (England and Wales) Rules 2011, certain statutory documents are being made available electronically. This includes the Special Administrators’ proposals.

• The link to the Special Administrators’ proposals can be found here

If you are unable to download the PDF file, you may need to update your Adobe software to the latest version. Please go to the Adobe website http://get.adobe.com/uk/reader/.

Hard copies of the Special Administrators’ proposals are available on request and free of charge. If you wish to receive hard copies of the proposals, please:

• telephone +44 (0)20 3284 8829; or
• email worldspreads-enquiries@kpmg.co.uk; or
• write to KPMG LLP, 8 Salisbury Square, London EC4Y 8BB, United Kingdom

Creditors’ and clients’ respective claim and proxy forms can be found here:

• Client asset statement form
• Client proxy form
• Client statement form
• Creditor proxy form
• Creditor's statement of claim

Please refer to appendix 6 of the Joint Special Administrators’ Proposals, being further information regarding the initial meeting of clients and creditors and the voting process, for assistance regarding completion of the relevant claim and proxy form.

Any client who has already responded to the statement emailed to the by the Special Administrators does not need to resubmit their claim for voting purposes.  


Meeting of clients and creditors on 23 May 2012

It is likely that the meeting of clients and creditors on 23 May 2012 will be well attended and we recommend that attendees arrive at the venue in plenty of time to complete the registration process and take their seats. Registration will commence at 9.30am. Due to the restrictions at the Methodist Central Hall, each creditor and client should limit the number of attendees at the meeting to a maximum of three people.

Details of how to get to the Methodist Central Hall and links to additional information on the venue, including information for disabled visitors, can be found here:

• Location of venue
• How to get to the venue
• Accessibility information

The meeting format will consist of the Special Administrators presenting their proposals and updating clients and creditors on progress in the special administration. There will then be an opportunity for clients and creditors to ask questions in respect of the proposals and the conduct of the special administration. Clients and creditors who have not already voted will then be asked to vote on the Special Administrators’ proposals and the establishment of a creditors committee (likely to comprise three representatives appointed by the "clients", one representatives appointed by the "creditors" and one representative of the FSCS).

The Special Administrators will endeavour to be in a position to announce the outcome of the votes at the end of the meeting although, depending on the number of attendees, it may be necessary to announce the result after the meeting. The result of the votes will be made available on this website.

You are reminded that if you would like to vote at the meeting, whether in person or by proxy, you must provide details of your claim to the Special Administrators by 12 noon on 22 May 2012. Please note that the term "client" refers to a claimant who thinks he/she has an interest in the segregated client money pool under the FSA's client money regulations (CASS 7) or a claimant with a proprietary interest in a client asset or assets. A "creditor" may well have been a client of the firm in the ordinary sense of the word, but if he does not have a client money or client asset claim under the relevant FSA CASS rules, then he is regarded as a "creditor" for these purposes, with a claim against the unsecured estate. Accordingly, you may have claims against the Company as both a creditor or a client. If this is the case and you wish to vote at the meeting, you must fill in both forms. We will be completing a verification process as and when claims forms are received in order to ensure that clients have completed the correct form(s).