As we wrote was likely to happen just a few days ago, Dublin-based financial spreadbetting firm MarketSpreads has had its license fully reinstated by the Central Bank of Ireland, and has re-opened for business.
The suspension began on Thursday April 5, and lasted 22 days. As of Wednesday April 11, after a report from accounting firm Grant Thornton confirmed that all client funds were in place and were properly segregated, the client funds were unfrozen, and MarketSpreads was allowed to honour client withdrawal requests. We understand that while there were (understandably) some client fund withdrawals, most of MarketSpreads’ clients remained loyal and did not abandon the company.
MarketSpreads was very open with its clientele and the general public during the suspension, without sugarcoating the situation, in providing periodic detailed updates on its website as things progressed. The co-CEOs John McGlade and John McNicholl even went as far as posting thier personal mobile telephone numbers on their website, and made themselves personally accessible 24/7 throughout.
As we wrote earlier, the issues leading to MarketSpreads’ suspension had nothing to do with current management, nor the current financial state of the company, but rather stem from legacy financial issues from before 2010. Essentially, the company’s auditors Ernst & Young were been unable to express an audit opinion on MarketSpreads’ 2009 accounts, when the company was owned and managed by others.
MarketSpreads certainly has its work cut out for it, and will need to work hard to regain certain lost clients and the overall trust of the trading public. However, having followed this situation closely over the past few weeks, it seems as though MarketSpreads’ management’s handling of the situation is a very good example of proper crisis management. Had they been less open and transparent with their clients and the public, things likely would have been a lot worse.
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