It is feasible. Spread-betting, by its very nature, is high risk as – unlike a
casino – the trades are open-ended. But the investigations have only just
begun.

Either way, the company was clearly in financial trouble. On February 28, it
issued a profits warning, blaming an “unusual pattern of client trading”
and the “combination of benign market conditions and low volatility”.
Worryingly, it said it simply expected “a more normal trend to prevail
in future”. That followed a loss before tax in 2011 of €797,000.

The profits warning was accompanied by the resignation of finance director
Niall O’Kelly after eight years at the company – “a separate and
unrelated matter”, WorldSpreads insisted. Two weeks later, and just two
days before the “sledgehammer” revelations, chief executive Conor
Foley, founder and largest shareholder with a 17pc stake, quit “with
immediate effect to pursue other interests”.

Faced with whirling speculation about his role in the alleged fraud, Mr Foley
today pushed out a statement saying the “first he learned of these
issues was on Friday, at the same time as the rest of the board”. It
added: “His decision to step down was completely unrelated to these
issues.”

However, it was not the first time WorldSpreads’ numbers had been under the
spotlight. MarketSpreads, which was spun out of WorldSpreads’ Irish business
in a management buy-out in late 2009, last month refused to pay the final
€1.65m instalment of its €11m acquisition in a dispute over the accounts.
According to MarketSpreads, the 2009 figures did not match what it had been
told – allowing it to invoke a clause to withhold payment. Last year,
similar concerns were only resolved after WorldSpreads agreed to accept far
less than the €1.58m instalment then scheduled.

Other lingering questions remain. MarketSpreads’ auditors are refusing to
sign-off its accounts until they get clarification on the 2009,
pre-acquisition figures from WorldSpreads. Unless the issue is resolved
soon, MarketSpreads will be struck off Ireland’s register of companies for
failing to file accounts on time.

The dispute raises questions about both WorldSpreads’ accounting and the role
of the auditors, Ernst Young. MarketSpreads’ joint-auditors Hughes
Blake are said to be struggling to get clarity on the 2009 figures. EY
said: “For reasons of client confidentiality we are unable to comment.”

And, separately, MarketSpreads is pursuing through the courts one of
WorldSpreads’ two founders, Brian O’Neill, for up to €1.7m. Mr Foley and Mr
O’Neill set up SportsSpread, the forerunner of WorldSpreads, in 2000, before
listing it in 2007. At its peak, it was worth around £40m. Now, it’s selling
the furniture to pay back its creditors.