This week, the UK financial services authority confirmed that almost all 15k clients of collapsed spread-betting firm Worldspreads would qualify for compensation. For around 80 high-end clients, the statutory compensation scheme will cover the first £50k; anything over that will have to be reclaimed from a pool established by administrators. Whatever’s left in this pool after the firm’s liabilities are addressed will be paid out on a pro rata basis, according to a report in the Irish Times.
Turning that last story on its head, an attempt by spread-betting firm Spreadex to compel a punter to make good on what he owes has been quashed by a UK judge. It began last May, when Spreadex customer Colin Cochrane claimed he’d gone away to visit a friend for a couple days. During his absence, Cochrane’s girlfriend’s five-year-old son got on Cochrane’s computer and did some spread-betting, or “playing games,” as the tyke allegedly told the allegedly shocked Cochrane when he saw the £50k bill on his Spreadex account. Cochrane claimed the boy’s trades in oil, gold and silver were all made without his knowledge or blessing, therefore Cochrane wasn’t liable. Spreadex wasn’t buying this ‘dog ate my portfolio’ story and filed suit.
On Monday, Metro reported deputy judge David Donaldson had decided that the contract Spreadex provided Cochrane was “unfair.” Donaldson appeared to take issue with the 49-page length of the terms and conditions, saying it would have been “close to a miracle” had Cochrane found the “entirely inadequate” clause that made him responsible for controlling access to his account. Frankly, we suspect Spreadex has grounds for appeal. If Donaldson thinks 49-pages is a long contract, he’s clearly never scrolled through one of those Old Testament-length iTunes contracts Apple sends with each update.
Australian property developer Harry Kakavas probably wished he could have used Cochrane’s gambit for not making good on his markers, but unfortunately for Kakavas (pictured above right), the security cameras at Melbourne’s Crown Casino caught him in the act. Over a 14-month span beginning in June 2005, Kakavas made 30 separate visits to the casino, turning over $1.479b in the process. The casino kept about $20.5m (a 1.4% win rate, FYI), prompting Kakavas to sue Crown for having had the gall to offer him the use of their corporate jet and other high-roller perks.
On Monday, Justice Bernard Bongiorno rejected Kakavas’ appeal of a lower court ruling that told Kakavas to take it like a man. In dismissing Kakavas’ argument that his pathological gambling malady made him not responsible for making rational decisions about money, Bongiorno noted that Kakavas had at times negotiated even better perks than the casino had originally offered and “had withheld his custom from Crown when he did not get what he wanted. These are not the characteristics of someone unable to conserve his own interests.” Kakavas was also ordered to pay Crown’s court costs.