Debts from Spread Betting

Posted on 28. Jan, 2013 by in Wealth Essentials

Spread betting

This is a guest post

If you are considering taking up one of the spread betting offers offered by companies to entice you into opening an account with them, you should never forget that, as the warnings displayed by any spread betting provider state, things might go the other way.

Most losses occurred with sports rather than financial spread betting. The former international footballer, Dietmar “Didi” Hamann, lost £288,400 spread betting on a cricket match between Australia and South Africa. Should have used a stop loss, Didi. He found himself in the news once more when Sporting Index filed papers at the High Court to recover the debt. Negotiations ensued to avoid the need to go to court, which Hamann said he believed would be successful. He said, “We will find a solution. There won’t be any court hearing.’

The fourth-richest man in the Republic of Ireland, Dermot Desmond, settled his £750,000 debt to Sporting Index in 2008 a month before he was due to go on trial at the High Court with regards to it. He had amassed debt on a string of bets on golf. He would have recovered the money if he had bet that Padraig Harrington would win the 2007 Open, but Sporting Index said the bet was never completed because the odds changed and Desmond’s secretary did not confirm the bet. Sporting Index records all calls. Desmond won at least £2 million on other bets on Harrington.

Disabled 58 year-old former dentist and church treasurer, Richard Hardy, did not escape court. He went on trial earlier this year for obtaining a £400,000 mortgage by lying about his criminal record and income. The recorder, Gregory Bull, QC, said, “The application form contained a number of blatant lies.”

When police raided Hardy’s home in Upton St Leonard in 2008 to arrest him for arson, they found a note where he confessed to losing £1.5 million on spread betting on share prices with IG Index. The note said he had “pilfered all our resources”: the houses of his and his wife’s parents, his wife’s redundancy money and more money from his children. He ran up debts in the name of his wife to cover his losses.

Hardy could have been gaoled nine years previously if church leaders had pressed for prosecution when more than £53,000 was removed from accounts. Police were called, but Hardy repaid the money, interest and costs.

Hardy was sentenced to a minimum of three years imprisonment. He was convicted of rape and incitement to murder in the 1980s.

Another court case was that of Nicholas Levene, once a derivatives trader with access to a private jet whose love of the good life earned him the nickname of Beano. After a 15 month investigation, he was charged with 11 counts including false accounting, fraud and money laundering. Among the £200 million he owed was a debt to IG Index: he lost £720,000 betting on one cricket match in 2008. He failed to appear at court hearings and was found to have checked into the Priory for gambling addiction. He vowed to repay investors, but only £5 million was recovered. Levene began his career as a tea boy with Phillips & Drew. He was once a colleague of City “Superwoman,” Nicola Horlick.

In the news recently was Kweku Adoboli, on trial for gambling away £1.4bn of money belonging to his employer, the Swiss bank, UBS. He was equally careless of his own money. While he won £18,700 spread betting through City Index, he lost £123,000 on IG Index.

Image by sincerelyhiten

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