Michael Spencer forced to inject £70m as City Index clients default
Michael Spencer, the Conservative party treasurer, has been forced to inject £70m of his personal fortune into City Index after traders defaulted on tens of millions of pounds worth of trades.
Accounts filed at Companies House late last week reveal that clients of the spread betting business, were unable to cover £43m of losses after share prices collapsed.
Just six clients accounted for the majority of the loss, with one client losing £29m betting on a single Spanish property company.
Notes to the accounts reveal that another City Index client has lost a further £12m speculating on the markets, since the year end. To date £4m of that debt has been recovered.
City Index – which is owned by Mr Spencer's private vehicle IPGL Limited – lost a further £7.2m in the year to March 31 2008 following the collapse of US-based Sentinel Management Group. A City Index subsidiary had deposited £28m with Sentinel which collapsed into Chapter 11 bankruptcy in August 2007. City Index has recovered some of the money, however according to the accounts £7.2m remains outstanding.
Quelle: Telegraph.co.uk