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Spencer finds £70m to aid spread-better
02.03.09
Tory Party treasurer Michael Spencer has reportedly been forced personally to bail out his spread betting firm City Index to the tune of £70 million after a handful of punters failed to pay up on big losses.
One client reportedly lost £29 million on one bet while another lost £12 million, but so far has only paid up £4 million.
The bulk of the losses were in the hands of just six clients.
City Index is owned by Spencer's private vehicle IPGL. Accounts show that some £43 million in losses have not been paid by the unlucky punters. Martin Belsham, chief executive of City Index since January, admitted there had been mistakes.
"Lessons have been learnt and the underlying business remains sound. We are now trading profitably," said Belsham. "At no time were client monies at risk and the group continued to meet its regulatory capital obligations."
City Index lost £30 million in the year to March after making a £1 million profit the year before. Revenue rose £28 million to £78 million. IPGL injected £30.2 million, as well as loans totalling £40 million.
Reader views (1)
Spencer can afford it and has built his entire empire on spread bets and margins .... The bigger question begs if this man is suitable to be the treasurer of the tory party - where we seek clarity there are many shadows surronding this man ..... ICAP did not grow without more than a few skeletons in its closet...
- Mark, China
