EY settles lawsuit with Worldspreads administrators KPMG

When spread-betting company went bust there was a black hole in its client funds of at least £13m

The High Court was informed last week that the case had been settled and it was struck out by Mr Justice Raymond Fullam

The High Court was informed last week that the case had been settled and it was struck out by Mr Justice Raymond Fullam

 

EY, which was auditor to Worldspreads prior to its 2012 collapse, has settled a lawsuit brought against it by the KPMG administrators of the bust spread-betting company.

The administrators launched a High Court case against EY two years ago, alleging breach of contract, which was denied by EY.

The case was due to focus on aspects including EY’s auditing of the accounts and whether it played any role in the drafting of Worldspreads’s regulatory reports about client money prior to its collapse.

When the Dublin-headquartered, London-listed spread better went bust, there was a black hole in its client funds of at least £13 million (€18 million).

EY has always rejected any accusations of wrongdoing, and previously promised to “vigorously defend” the case.

The High Court was informed last week that the case had been settled and it was struck out by Mr Justice Raymond Fullam. EY defended the action using Eversheds solicitors, while the administrators had hired the firm Hayes.

Responding to queries over whether compensation was paid by EY and whether any proceeds would be handed over to customers who had lost cash, Jane Moriarty, the KPMG administrator, said she could not provide any details.

“We have a creditors’ report due out in the next week or two which will give an update on all these issues,” she said.

EY did not respond to a request for comment.

In its last update to Worldspreads’s creditors in October, the KPMG administrators said the outcome of the case against EY would “determine the [financial] outcome for creditors”. “We are satisfied that it remains in the best interests of the company to proceed” with the lawsuit, they said.