Fight to recover losses after the collapse of WorldSpreads

Jonathan Mortimer, the head of dispute resolution at Raworths Solicitors, has been instructed by the WorldSpreads Action Group, it was revealed yesterday.

WorldSpreads was placed in special administration in March 2012 when a ‘black hole’ was found in its accounts, leaving hundreds of customers facing a loss.

Spread-betting is a form of regulated gambling on the value of shares and other investments. Documents filed with the court in support of the special administration order reveal that clients were owed in the order of £30m, according to Mr Mortimer.

Mr Mortimer, of Harrogate-based Raworths, said: “Many individuals are now left with very reduced savings and investments and I am determined to do what we can to recover funds from those responsible for the downfall of the organisation.”

Nineteen investors have so far joined the action group, with a combined loss of around £10m, Mr Mortimer said.

He added: “We are exploring claims against the directors and accountants and attempting to recover what we can from the company via the administrators.

“We have a number of investors from Yorkshire, as well as nationally, and if anyone has experienced a similar loss in relation to WorldSpreads, we would urge them to join the action group.”

A spokesman for the Financial Services Authority (FSA), said yesterday: “The administration of Worldspreads followed the discovery of accounting irregularities which the company became aware of during the course of Friday, March 16.

“Following this, it quickly became apparent that the company was unable to continue in business and the directors and their advisers concluded that the best course of action, in order to mitigate losses for clients, would be to place the company into special administration.” Depending on individual circumstances, customers may have access to the Financial Services Compensation Scheme (FSCS) should there be any losses, the FSA spokesman said.

He added: “The protection of client assets remains a key priority for us.

“Inadequate records, ineffective segregation of client assets and a low level of awareness of requirements in this area risk causing detriment to clients, creditors and counterparties, with associated reputational damage to confidence in UK markets.”

Over this financial year, the FSA is strengthening its regulatory and supervisory approach for firms holding client money, and safe custody assets, the spokesman added.

Jane Moriarty, restructuring partner at KPMG and joint administrator of Worldspreads, said: “At the recent Worldspreads creditors’ meeting, the creditors elected a committee to represent their interests in the administration.

“We are now working with the creditors’ committee to examine the causes of the failure of Worldspreads and what legal remedies may be available to return money to the estate.”