MarketSpreads also seeking €10M compensation from E&Y.
Dublin-based financial spreadbetting firm MarketSpreads has apparently had a successful first week of operation, after being forced to shut for three weeks by the Central Bank of Ireland and then restarting activity this past Monday.
Sources close to the situation inform LeapRate that client trading volume levels at MarketSpreads are already back up to about half of normal pre-suspension levels, steadily increasing as the week progressed. A relatively volatile week in the equity and commodity markets certainly helped.
More than half of client funds at MarketSpreads were withdrawn during the three week hiatus. A report by accounting firm Grant Thornton confirmed that all client funds at MarketSpreads were indeed properly segregated from company funds. The suspension arose from legacy accounting issues stemming from MarketSpreads' financials before 2010.
And this weekend's Sunday Times reported that MarketSpreads is indeed seeking up to €10 million compensation from Ernst & Young ("E&Y"), the auditors of now-bankrupt parent WorldSpreads. MarketSpreads' new management and shareholders, who purchased MarketSpreads from WorldSpreads in 2010, claim that the company's books for 2009, audited by E&Y, were one of the things that gave it comfort at the time of the takeover. A subsequent €7 million restatement to those books was a key factor in the Irish Central Bank temporarily suspending MarketSpreads' license.
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