Central Bank lifts trading block on Marketspreads
Spread betting firm Marketspreads has had its trading suspension lifted by the Central Bank following a three-week blackout.
The Central Bank had ordered Marketspreads to stop trading just before Easter. It said at the time that it had concerns about the firm's capital adequacy and expressed issues with an audit of 2009 accounts.
Yesterday the regulator said that it was "satisfied with the steps which the firm has taken to address its legacy financial issues" and lifted the operating suspension.
The 2009 Marketspreads accounts related to a period just ahead of the business being hived off from Worldspreads in a management buyout. Current Marketspreads directors say they subsequently uncovered a "litany of serious irregularities" perpetrated by former directors and management.
Marketspreads has sued Worldspreads for fraudulent misrepresentations and is withholding a €1.4m deferred acquisition payment.
Marketspreads also recently secured a €1.7m High Court judgment against former executives Brian O'Neill and Fergus Rice. The pair had diverted €1.4m from Marketspreads to another company in which they were involved. The two men resigned from the company last year.
The new executive team at Marketspreads -- joint chief executives John McNicholl and John McGlade -- have been closely liaising with the Central Bank to address the legacy issues that arose.
The Central Bank sought and was later satisfied with assurances that client liabilities at Marketspreads were matched with segregated funds.
Worldspreads was placed in administration by the UK's Financial Services Authority last month after it emerged that there was a €12m shortfall in its customer accounts.
In order to satisfy Central Bank capital adequacy concerns, Marketspreads shareholder and director Ray Curran has agreed to convert over €2m in loans to preference shares in the company. Other directors will also stump up some equity.
Mr McGlade said that Marketspreads will be open for trades from 11pm tomorrow. He welcomed the Central Bank decision to lift the suspension. The company had about 2,000 clients before the suspension was imposed.