Wednesday 13 November 2019

Worldspreads bosses fined and banned by UK authorities

UK Financial Conduct Authority in London
UK Financial Conduct Authority in London
Donal O'Donovan

Donal O'Donovan

The UK's financial regulator has fined collapsed Irish spread-betting firm Worldspreads' former chief financial officer, Niall O'Kelly £11,900 and hit former financial controller Lukhvir Thind with a £105,000 fine for engaging in market abuse.

Both were also permanently banned from performing any function related to regulated activity in the UK.

In 2012 WorldSpreads, an Irish-headquartered, London-listed spread betting operator collapsed after the discovery of accounting breaches that had resulted in £13m going missing from clients' accounts.

Client funds and the company's own money had been mixed up in the same accounts. That put the assets of about 15,000 retail customers at risk.

The company, which at the time counted former Finance Minister Charlie McCreevy as a director, was placed into administration by the UK's Financial Services Authority.

Yesterday, the UK's Financial Conduct Authority (FCA) linked the problems at the company right back to its market flotation in 2007. Mr O'Kelly was "closely involved" in drafting and approving documentation prepared for investors ahead of the Irish company's listing in London in 2007.

The paper work "contained materially-misleading information and omitted key information", the FCA said.

The FCA also found that Mr O'Kelly helped manage an undisclosed "internal hedging" strategy at Worldspreads using fake client trading accounts and the unauthorised use of actual client trading accounts.

"By doing this, he artificially inflated assets on Worldspreads' balance sheet," the FCA said.

The regulator also fined the firm's former financial controller, Lukhvir Thind, who alongside Mr O'Kelly, it found, had falsified information in annual accounts for the two years before the company went bankrupt.

"Mr Thind and Mr O'Kelly deliberately and repeatedly disseminated false and misleading information relating to a publicly listed company. Their actions amounted to serious market abuse, undermining the integrity of our markets and this will not be tolerated," Mark Steward, FCA Director of Enforcement and Market Oversight, said.

"It is to Mr Thind's credit that he, eventually, raised concerns to the WSL Board and that both he and Mr O'Kelly cooperated with our investigation and admitted market abuse," he added.

Mr O'Kelly's fine was initially £468,756, but was reduced after he provided evidence of serious financial hardship. Mr Thind's fine was £105,000, down from £150,000, after both agreed to settle early.

Irish Independent

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