Remember my post not so long ago about spread betting and associated risks? There you go. Obviously this is not City Index’s fault but the trader’s himself however this just goes to show you that spread betting is as risky as leveraged forex or any other type of a leveraged investment.
A former director of Intercapital, the forerunner of interdealer broker ICAP, has been bankrupted after losing £6m in the stock market crash.
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Geoffrey Conway-Henderson ran up losses of £5.8m betting on Aim-listed oil and gas stocks with City Index, the private spread betting business owned by his close friend and former colleague Michael Spencer, founder of ICAP. According to court documents seen by The Daily Telegraph, City Index closed Mr Conway-Henderson’s positions in July 2008 and then bankrupted him last year claiming he had run up £5.8m of trading losses and owed £160,000 worth of unpaid interest.
Mr Conway-Henderson was one of the first people employed by Mr Spencer at Intercapital in the late 1980s when he founded the firm. The company later merged with Garban, before being renamed ICAP. The pair worked together for more than two decades building ICAP into one of the City’s largest brokers and were said to be “close friends”.
City Index wrote off £78m in the two years to March 2009 as clients failed to make margin calls as the market crashed.