Conor Foley of WorldSpreads and Incomplete Media Coverage
I have decided to take this unusual step of posting this statement online on this domain name in order to give a more balanced and accurate perspective of newspaper articles about me which appear at the top of Google Search when people search for my name or the company name WorldSpreads.
I was the founder and CEO of a financial market derivatives company called WorldSpreads which went into administration in March 2012 as a result of fraudulent activity in the Finance Department.
At the time the company went into administration it was generating monthly revenues of approximately €1.5m, employed 75 staff at its London head office and a further 50 staff in 12 countries around the world. The company was regulated by the FSA and was quoted on the London Stock Exchange and the Irish Stock Exchange. On average WorldSpreads was transacting 20,000 online trades per day and had 15,000 clients on its database. By any metric the company was performing well.
Although the WorldSpreads trading centre and main activities were located in London, the holding company or parent company (called WorldSpreads Group) was actually located in Ireland. This was because the company was first launched in Ireland in 2004, prior to selling the Irish division to the Irish management team in December 2009.
At all times I was located in London and oversaw the launch and growth of WorldSpreads UK from 2005 onwards. By a strange technicality, my Contract of Employment was with WorldSpreads Group (the Irish parent company) even though I spent all of my time working in London for WorldSpreads UK. The significance of this will become apparent later in this statement.
Fraud within the Finance Department
On 12th March 2012 it was discovered that the Finance Department in the UK office had been reporting false figures to the company board, the financial regulator and the stock market. The financial controller in the London office made this astonishing declaration to the senior executives in the London office but said he was unaware of the extent of the false reporting because the full Finance function of the company was controlled by the company Chief Financial Officer (CFO) in Dublin.
When challenged, the CFO in Dublin admitted the fraud and also the magnitude of it. As there is a regulatory investigation taking place as to why this happened or where the funds went it would not be appropriate for me to state anything further at this time, other than the above facts. I await the outcome of this investigation as much as the other shareholders, creditors, employees and clients of WorldSpreads. We need to know what happened to the money and, for the avoidance of any doubt, I am not being investigated for any matter in relation to the collapse of the company.
KPMG appointed as Special Administrators
In March 2012, KPMG is London were appointed as Special Administrators of WorldSpreads UK. Their objective was to recover as much money as possible for the Creditors of the company.
Shortly after they were appointed, I received a communication from KPMG to say that I owed the company (i.e. the UK company) a sum of money that was paid to me over time by WorldSpreads UK. The sum in question was £319,000. I explained to KPMG that this was supposed to have been offset by the Finance Department against salary payments of £340,000 which I was owed. When the company went into administration the Finance Department had not processed the inter-company reconciliation between the £319,000 and the £340,000.
Therefore, by the strict letter of the law, I was owed £340,000 by the Irish WorldSpreads company (i.e. the company with whom I had my employment contract), but I owed £319,000 to the UK company, where I was based and for whom I really worked.
The matter went to the High Court in the UK and the Judge ruled that by the letter of the law I owed WorldSpreads UK the £319,000. When asked, under oath, as to why he hadn’t reconciled the £319,000 and the £340,000 the Financial Controller stated that he was “too busy”. There is no dispute as to whether there should have been a reconciliation or not.
Some of the media coverage about the above Court action against KPMG failed to mention that I am owed an even greater amount from the Irish company than I owe the UK company. The reader could be left with an impression that I received money to which I was not entitled. In fact, the opposite is the case. It is important that I clarify this.
At a wider level, I would also like to point out that I received a letter from the UK Insolvency Service in October 2013 advising that no action was being taken against me for the collapse of WorldSpreads, following their investigation into the matter. Again, certain media exposure does not reflect this accurately and it is important I set the record straight on that.