ADS Securities UK sees Ernst & Young resign as auditor


LeapRate has learned via regulatory filings that FCA regulated broker ADS Securities London Limited, the UK arm of Abu Dhabi based broker ADS Securities LLC, has had its auditor Ernst & Young resign.

No word has been received about a replacement for Ernst & Young at ADS.

ADS entered the UK market in late 2015 via the acquisition of Pioneer Trader Limited, formally launching its London office in early 2015. Pioneer’s auditor had been BDO LLP, and ADS replaced them with the larger Ernst & Young last year.

However ADS has had a rough run of it lately. ADS UK saw its net loss balloon to £5.5 million in 2015. And its CEO since ADS came to the UK, James Watson, recently resigned. ADS has been making a big push into the institutional ‘prime of prime’ brokerage space out of the UK, however that market has become increasingly crowded and competitive during 2016.

The Ernst & Young resignation letter read as follows:


25 October 2016

ADS Securities London Limited

9th Floor

125 Old Broad Street

London EC2N 1AR

 

Dear Sirs

ADS securities London Limited

Company Registered Number 07785265

In accordance with section 516 of the Companies Act 2006, we write to notify you of our ceasing to hold office as auditor of ADS Securities London Limited. This takes effect from the date on which you receive this letter.

In accordance with section 519(3B) of that Act, we confirm that there are no reasons and no matters, connected with our ceasing to hold office which we consider should be brought to the attention of the members or creditors of the company.

We draw our attention to the fact that ADS Securities London Limited has its own statutory obligations where we have ceased to hold office (as detailed, in particular, in Sections, 520 and 523 of the Act), including, depending on the reasons, the requirement to notify the appropriate audit authority if we cease to hold office before the end of our term of office as auditors.

If you have any questions on your legal obligations we recommend that you seek legal advice.

Yours faithfully

Ernst & Young LLP

ICAEW Registration Number – C009126168

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  • Adil Siddiqui

    The big-4 do possess some of the brightest and creative minds that can support our businesses, however the fees can pile-up and it may be wise to forge a relation with a mid-tier auditor who knows the CFD market (particularly FX and derivatives for calculation purposes) and can provide additional advice and foresight. Furthermore, UK-based firms will find their ‘Annual Financial Audits’ coming with an extra layer of scrutiny as the auditor is obligated to formally review the way regulated firms manage Client Money under the Assurance Standards. This is definitely a good move to ensure that the safety of client funds are part and parcel of a firm’s governance, particularly as it’s a core principle.

    • Van

      Adil – isn’t there a reason that the Big-4 cost a little more than some guy-and-his-brother-in-law audit firm? They’re better. And big clients and investors know that someone who actually knows what they are doing and have the right resources to stand up to a cheating client is putting their stamp of approval on the company’s financials. Smaller auditors who have just a few big clients are always afraid of losing their clients so they are much more likely to give in to what the client wants to report. Much less likely to issue a warning. it doesn’t say here who they’re switching to. If it’s a smaller auditor then they are being short sighted about how dumb their clients are.

      • Adil Siddiqui

        interesting manner this discussion is taking, auditors are all the same, if you can afford the big bucks then you should, however there are many firms that are small with a few partners, whether they are in Essex or Surrey or in Timbuktu a qualified accountant will do their best, the key here is how useful the auditor is for the broker and how they can offer guidance and advice to support the overall business.

        • Van

          Disagree. Auditors and audit firms are NOT all the same. Big firms can and do screw up too, like Arthur Anderson. But you know why they messed up? Cause their Houston office had but one big client, Enron. And since Enron was so big and important to the partners there they couldn’t stand up to Enron, or else they’d lose their big meal ticket. That’s the basic problem when big money clients get audited by smaller firms. They are, in the big scheme of things, less likely to protest a client’s accounting for Reveneus, expenses, issuance of a warning letter, etc.

          • Robin Hood

            Adil
            I recall that I sacked you from Saxo bank because you knew nothing about the business and you were a complete muppet, things haven’t changed? ADS are a bucket shop and paying over the odds to attract good names to work for them but these have ALL left after a short stint. You can pay through central bank to tell the world that you have $400 million when in fact you have black market money and NOT a lot of that. ADS were denied a licence in Dubai so they went to ADS, they were denied three times by the UK regulator so they bought a small bucket shop firm and came in through the back door. They are only respected by you as you tried many times to get a job there but wasn’t successful! A bucket shop is a bucket shop and trying to save money by using a firm put of Essex shows that. Three large and respected names have resigned from ADS and the reason is because they have no funds, no business plan and seeing the CEO leave is another reason the regulator should stop them from becoming and Alpari who you also worked for???

    • NWS Blue Square

      Adil – You guys at Tradenext used some tiny little auditor out in Essex next to a used car parts garage and look how that turned out!! Also, this isn’t a case of ADS trying to save money, E&Y have decided they dont want any involvement with ADS for some reason…..

      • Adil Siddiqui

        oops someone took it to heart! i was merely making a point. ADS is definitely large organisation and very respected in the market. Take a chill pill! The only way is Essex don’t fol mouth the most progressive country in the United Kingdom, im guessing who wrote this comment :} man -up… i’ll find out by issuing a subpoena!

  • Philip

    I wonder what the E&Y guys found

  • Diligent

    Why would anyone use ADS as a prime broker or POP after what happened with Fortress Prime. If anything goes wrong you’re on your own. In the UAE those in power make their own rules. How much were brokers owed when Fortress went belly-up? Tens of millions right? Fools never learn.

  • Mark C

    Well … talk about RED FLAGS!

  • Curious

    All this auditor talk is interesting (YAWN !!!!). However would be interesting to know what really happened. Did E&Y quit as auditor? That would be very worrisome. Or did ADS fire them? Less worrisome, but still deserving an explanation.

    • Common sense ain’t that common

      can you not read?

  • Johs Brolin

    The rumour doing the rounds is that they’re out of money, spunked all that $400m up the wall and now Ghanem is having to go out and raise new capital.

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ADS Securities UK sees Ernst & Young resign as auditor

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