Some WorldSpreads Clients Finally Get Some Of Their Money Back
WorldSpreads went down the tubes in the middle of March, taking some supposedly segregated customer funds with it. Now however those long suffering customers are finally starting to get at least some of their money back, albeit from The Financial Services Compensation Scheme rather than from the administrators of WorldSpreads. According to WorldSpreads customer Rav Shah:
I would like to confirm that i have received payouts from FSCS. At least stage 1 has been completed.
However several commentators on Rav's blog say they are still waiting.
Unfortunately that also applies to customers of MF Global, which went down the tubes back in November 2011, taking much larger quantities of supposedly segregated customer funds with it. In their six month "progress" report at the end of May, special administrators KPMG said that:
In excess of 100 professionals from KPMG have worked closely with over 700 MF Global staff on the MF Global UK special administration over the past six months. We are making headway in ensuring funds are returned: working with the Financial Services Compensation Scheme has seen 250 clients receive compensation payments to date and a further 400 will be paid imminently; around 850 clients have received $90m in our first interim client money distribution and a draft distribution plan for client assets will be presented to court next month.
According to a recent press release Richard Heis, joint special administrator of MF Global UK, said that:
Today’s court hearing represents an important milestone in returning some £54m of agreed client assets; largely comprising shareholdings plus some physically held securities and LME commodities and warrants. The MF Global UK asset distribution plan sets a precedent as it is the first use of such a plan under the special administration rules. We will be sending letters to clients with agreed asset claims over the coming days to explain and agree the final steps in returning their assets. The return of client assets will commence from 1st August.
Mr. Heis added that:
It is important to note that there is still over £1bn of alleged asset claims, principally where it is claimed that MF Global UK held the assets on behalf of clients but the company’s records show that the assets were transferred to MF Global UK under absolute title transfer. The single largest alleged client asset claimant is MF Global Inc., which has submitted a claim for the return of $639m of US Treasury Bills and other assets. We have issued court proceedings to seek determination of the validity of the claim; the trial is scheduled for April 2013.
Even more unfortunately a lot more waiting to get their own money back would seem to be in store for a lot of people.