Spread betting. Open letter to FCA


Open letter to the Financial Conduct Authority

To whom it may concern

I have been tracking this grossly misleading promotional activity for several years now and am therefore very frustrated to see it still going on.

I first wrote about this very serious issue in my book, “Who can you trust about money” which after 2 years of work, I published in late 2013.

I have also brought specific examples of wrongdoing directly to the attention of the FCA before.

You may have records of these. I’ve not kept records of our correspondence as it was so very long ago.

In any event, this misleading nonsense is still going on; it’s hurting people and it needs to be stopped NOW.

Last week I attended yet another promotional event from the folk at ‘Learn to Trade’ (who also market themselves as ‘knowledge to action’) aimed at luring people into the high-risk activity of ‘trading’

As we know, this ‘Trading’ activity is just spread betting.

And this is something that I warn my readers about here.

Curiously, the words ‘spread betting’ were not mentioned once at the ‘learn to trade’ presentation.

Their event last week, like all the others that I’ve witnessed was attended by a group of people who seemed quite vulnerable and in need of real financial guidance.

I spoke to a couple of them afterwards to confirm this.

These people cannot afford to blow their funds on these sorts of high risk activity.

I’m sure you’re aware that c.80% of people lose everything or more of their original funds in this sort of activity (You will have seen the Cass business school data on this )

No risk warnings about success rates was given to the audience at this or any other events that I’ve attended.

The presenter also seemed quite vulnerable and had very little real knowledge of what he was presenting.  This is always the case in my experience.

Here are just some of the ideas we were given at this presentation:

  1. Apparently, the head of this business, Greg Secker, of “Learn to Trade” does a lot work for charity!
  2. Greg apparently runs a hedge fund.
    • Do ‘learn to trade’ run any funds at all?
    • I stopped the presenter and asked him to be clear on the name of this hedge fund. I was told it was called ‘Capital Index’. 
    • As far as I can tell, Capital index UK is simply a spread betting platform. And it pays 50% commissions to sellers.
  3. It is apparently possible – if you sign up to this deal – to get alongside the ‘traders’ of this hedge fund on their ‘trading’ floor in London.
  4. And you can learn to run funds for your friends and family too. These traders ‘run funds’ for lots of clients.
  5.  It is perfectly reasonable to expect 10% + returns on your money – per month.
    • This equates to 214% p.a.
    • And in fairness to them – this has been toned down from their previous claims (which I also reported to the FCA) of 5% per week (1,164% p.a. !!)
  6. That 70% of your trades will make profits IF you use ‘their system’ which can help you predict the future!
    We both know that there is no reliable way of predicting market movements minute by minute or even day to day.
  7. That your risks will be restricted to just 1% or 2% of your funds!!
  8. A pretty young lady in London (shown on video presenting with Greg Secker) now earns £20,000 + per month just from the commissions (called rebates) on selling this miracle system.
    I was left wondering whether she had ANY idea whatsoever about what she was selling.

My challenge to you is to put a stop to this now.

I’m aware of the FCA’s musings on the issue – and your plans to ‘tone down’ the gearing that people can expose themselves to (from absurdly high – to just painfully high) with spread betting.

To my mind this is nowhere near good enough.

You need to send inspectors out to these promotional companies and STOP them from making misleading claims or issuing misleading adverts of this nature – written or verbal – right away.

I would also ask that you do not allow your people to be ‘palmed’ off with the idea that this must have been some ‘rogue’ presenter and that they’ll make sure it doesn’t happen again.

This level of grossly misleading promotion has gone on at every single one of their events I’ve attended – and I’ve attended many.

Vulnerable people are getting hurt – a lot.

Please act now

Paul Claireaux

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