Reed Smith has won the role acting for the administrators of WorldSpreads, the spread-betting operator being wound up after accounting irregularities were found in its finances.
London restructuring partner Charlotte Møller and Europe and Middle East disputes head Richard Spafford are understood to be advising KPMG partners Jane Moriarty and Samantha Bewick, who were appointed yesterday as special administrators of the AIM-listed company.
A KPMG spokeperson confirmed the appointment of Reed Smith, but a spokesperson for the US firm said it could not comment on ongoing client matters.
Mr Justice Hildyard appointed the KPMG duo to the job at an emergency hearing at the Rolls Building on Sunday evening, making a rare special administration order under the Investment Bank Special Administration Regulations 2011.
Møller and Spafford instructed Glen Davis QC and Jeremy Goldring of South Square for the company’s directors for the hearing.
WorldSpreads is dual-listed on AIM and the Republic of Ireland’s Enterprise Securities Market.
The wind-up follows the suspension of the company’s shares on both exchanges last Friday, with the company giving “possible financial irregularities” as the reason in a market announcement on the same day.
It announced today that a further investigation had led the board to believe that there was a shortfall of client money of roughly £13m and that around £29.7m was owed to clients, while the total cash balances at the company’s disposal was approximately £16.6m.
A WorldSpreads spokesperson confirmed that Dominic Bacon – one of The Lawyer’s Hot 100 lawyers in 2004 – remains general counsel. Bacon was also shortlisted for The Lawyer’s In-House Lawyer of the Year award in 2009 (29 June 2009).