WorldSpread staff lose jobs

The group of 52 City workers were informed of their fate on Monday by administrators at KPMG, The Daily Telegraph has learnt. Staff were told that they will need to apply to the Government's Redundancy Payments Office for compensation - which can take several weeks to pay out.

A spokesman for KPMG said: "We can confirm that, unfortunately 52 staff from Worldspreads Limited have been made redundant as administrators wind down the business.

"Around 12 have been retained to help with the wind down. KPMG is helping staff made redundant, who will need to claim wages owed through the Government redundancy scheme."

WorldSpreads was put into administration late on Sunday after a £13m "black hole" was found in the accounts, putting around 15,000 clients – mostly retail customers – at risk of losing almost half their money. KPMG said clients were owed £29.7m, which should have been held in a segregated customer account, but that the group's total cash came to just £16.6m.

KPMG has said there will be no actual sale of the business, although some of its software and data centre assets could be sold.

ETX Capital is thought to be among the interested parties although experts have warned it may be hard to sell client data as spreadbetters typically gamble with more than one provider.

"It's very hard to gain market share by buying client lists full of people that already bet with you," one well placed source said.

Clients at the company have set up an action group following its collapse.
Experts fear WorldSpread's collapse will lower consumer confidence in financial services providers such as brokers and spreadbetters. Segregated customer accounts are meant to ensure that client money is not "commingled" with company money.

Simon Bevan, head of Fraud at BDO, said: " When it comes to client funds there is no room for light touch regulation. Such businesses should be subjected to onerous regulatory oversight. This approach should be taken to any area where the potential fraud victims are individual investors or customers."