Tchenguiz must pay £6.5m debts to IG Index, court rules

Property investor Robert Tchenguiz must pay debts in excess of £6.5m to spread betting company IG Index, according to a court ruling handed down today. Tchenguiz had been embroiled in legal action with IG Index and other spread betting firms over millions of pounds of losses that he incurred between December 2019 and March 2020 speculating on the price of transport operator FirstGroup. Lawyers for Tchenguiz argued that IG should have given him a standard retail account. Instead, he was trading using an Elective Professional Client. According to the ruling, Tchenguiz invested around £39m of his own money spread betting with various firms over the period. Standard spread betting accounts have consumer protection measures in place that allow users to trade only when there is money in their account. If a user’s losses exceed the deposit, the position is terminated and the losses stop. However, financial sector professionals can apply for professional accounts with better rates that don’t have the same level of consumer protection, as long as they fulfil certain criteria. With professional accounts, losses can exceed users’ deposits. This allows users to take longer-term positions and also rack up potentially huge losses if the market moves against them. The case went to trial last month with lawyers focusing much of their argument on the Financial Conduct Authority’s Conduct of Business Sourcebook. Tchenguiz’s lawyers argued that when IG allowed him to be put on an EPC account they were in breach of COBS. In a ruling today, trial judge Judge Russen KC disagreed, said Tchenguiz’s lawyers couldn’t point to any contravention of the COBS that hadn’t been anticipated by the rules. “IG therefore succeeds on its claim against Mr Tchenguiz. He is liable to IG under clauses 8 and 16(4) of the customer agreement,” the judge ruled. In 2022, after another High Court trial that covered very similar issues, Tchenguiz was ordered to pay  CMC Spreadbet more than £1m. The judge stated that Tchenguiz was an “experienced spread better” who had been “properly and willingly” categorised as a professional client. Photo © Shutterstock