WorldSpreads in administration, 15,000 clients face losses WorldSpreads, an AIM-listed operator of online and phone betting services based in Dublin, was placed in administration late on Sunday after the Financial Services Authority (FSA) uncovered "accounting irregularities." It is believed that the company broke the golden rule that client money should not be "co-mingled" with company money. Administrators KPMG said the clients were owed £29.7m, which should have been held in a segregated customer account, but that the group's total cash balance - including "segregated money" - was just £16.6m. The police have been alerted over suspected criminal action. The development follows the departure last week of chief executive Conor Foley and finance director Niall O'Kelly. Mr O'Kelly had originally tendered his resignation in February after a profits warning. At the time, the company said it "maintains a strong balance sheet with net cash of €7m [£5.8m]." WorldSpreads" clients will be eligible for £50,000 compensation under the Financial Services Compensation Scheme. Beyond that, they will be treated as preferential creditors ahead of WorldSpreads" general estate. As a result, shareholders and lenders are likely to bear the bulk of the final losses. The collapse of WorldSpreads will also pose questions for its auditors, Ernst & Young. It will also lead to comparisons with the insolvency of the far-larger US brokerage, MF Global, which also broke the law by mingling client money with its own. KPMG is administrator to the brokerage's UK arm, which was audited by PricewaterhouseCoopers. WorldSpreads employed 66 staff, most of whom were based in London, whose jobs are now at risk. Last year, it made a €797,000 loss before tax. The FSA said: "Clients should be aware that any shortfall in the client money accounts will impact the amount of money that can be returned."