8th of April 2012 Author: Glo Wood
Following the order of the Ireland's Central Bank, another spread betting company facing difficulties
According to the mainstream media, the Irish Central Bank ordered Marketspreads to suspend further trading based on the rising concern for clients' accounts. This is the second spread betting company coming under the negative spotlight, following the recent failure of Worldspreads.
Last Friday, the Bank issued the statement explaining that it had been working closely with the company's current management team to tackle "legacy financial issues" as they called them. Additionally, the Bank justified its decision to suspend the firm's activities citing the concerns of capital inadequacy and inappropriate management of client funds at Marketspreads.
On the other hand, Marketspreads representatives deny any problems in the cited areas, adding that they are working on correcting some of the errors inherited from the former management of the company.
As auditors were "unable to express an opinion" on accounts submitted by the company to the end of 2009, the Central Bank noted the following: "In light of this, the Central Bank considers it necessary - in the interest of the proper and orderly regulation and supervision of an investment firm, and for the protection of investors - to suspend the activities of Marketspreads."
Marketspreads management promptly reacted and expressed disappointment at the "unfair and unjustified" decision which resulted in "serious reputational damage', the company concluded.
"We request that the bank allows us to release funds to our clients at the earliest possible juncture next week and to work with us to restore our licence to trade," Marketspreads spokesman said.
A review performed professional services firm Grant Thornton will be provided to the Central Bank early next week, proving that there was no mismanagement of the client accounts, the company said.
The next step is meeting between Marketspreads managers and the Central Bank officials, which might be followed by a hearing at the Financial Services Appeals Tribunal.
The last week's report published by Irish Examiner revealed that Marketspreads secured a judgment against previous directors Brian O'Neill and Fergus Rice concerning the diversion of Euro 1.68 million to another business; while Euro 2.5 million has been pledged to boost the company's capital base.
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