Here’s the note sent to Global Trader’s CFD and spread-betting clients – notification that after losses run up in Artilium, an Aim-listed telco, the firm is going into administration. Shame it doesn’t include an apology.
The resultant damage to clients remains unclear. Of course we’d love to know who was behind the “single client margin call default” that seems to have brought Global Trader down – and also how one bad bet could have such terminal consequences. (alphaville@ft.com)
Dear Client
Global Trader Europe Limited (“GTE”) is the UK based operating entity of the group of the Global Trader spread trade and contract for difference financial service provider. A regulatory capital deficit has arisen in GTE as a result of a single client margin call default. Under these circumstances GTE applied, at the close of business on Wednesday, 13 February 2008, to the Financial Services Authority (“FSA”) in the United Kingdom for a Variation of Permission — the official method by which companies change the terms of their authorisation, limiting principal activities to closing existing trades.
The Board and management of GTE, continues to evaluate alternatives for the re-capitilisation of GTE, including the possible introduction of an international equity partner. However, to ensure that the various alternatives can be evaluated within an orderly operational structure and regulated financial exposure, GTE will today file for Administration. An Administrator has already been tentatively appointed.
As a result no client withdrawals shall be affected until such time as the Administrator has taken effective control.
The management of GTE will make every effort to keep you informed of all progress made and ask for your patience and understanding. If you have any questions, please contact GTE on +44 20 7420 1200.
Kind Regards
The Global Trader Team