FCA bans and fines two spread betting employees for market abuse

"Their actions amounted to serious market abuse, undermining the integrity of our markets and this will not be tolerated."

Former Chief Financial Officer, Niall O’Kelly, was fined £11,900 and former Financial Controller, Lukhvir Thind, was fined £105,000.

In August 2007, Worldspreads Group floated on the Alternative Investment Market of the London Stock Exchange. O’Kelly was closely involved in drafting and approving the admission documentation for the flotation, which contained misleading information and omitted key information that investors would have needed in order to make an informed decision about the company.

The FCA also found that O’Kelly helped manage an undisclosed ‘internal hedging’ strategy at Worldspreads using fake client trading accounts and the unauthorised use of actual client trading accounts. By doing this, he artificially inflated assets on Worldspreads' balance sheet.

The regulator also discovered that in the Annual Accounts for 2010 and 2011, O’Kelly and Thind knowingly falsified critical financial information concerning Worldspreads' client liabilities and its cash position, which was passed to the company’s auditors.

Material shortfalls in Worldspreads' client money position, which eventually amounted to £15.9 million, were concealed from investors. Worldspreads was unable to meet this client money liability which ultimately led to its collapse in 2012.

O’Kelly and Thind agreed to settle at an early stage of the FCA’s investigation and therefore qualified for a 30% discount. O’Kelly also provided evidence of serious financial hardship. Were it not for the discount and Mr O’Kelly’s financial circumstances, the FCA would have fined Mr O’Kelly £468,756 and Mr Thind £150,000.

The FCA says it "considered carefully" whether to pursue criminal charges for market misconduct but decided, in light of the available evidence, that the case should be pursued under the Market Abuse regime.

Mark Steward, FCA Director of Enforcement and Market Oversight, said: “Mr Thind and Mr O’Kelly deliberately and repeatedly disseminated false and misleading information relating to a publicly listed company. Their actions amounted to serious market abuse, undermining the integrity of our markets and this will not be tolerated.

“It is to Mr Thind’s credit that he, eventually, raised concerns to the WSL Board and that both he and Mr O’Kelly cooperated with our investigation and admitted market abuse.”