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FIGJAM
23 Jan 21 13:04
Joined:
Date Joined: 05 Nov 04
| Topic/replies: 5,895 | Blogger: FIGJAM's blog
https://www.theguardian.com/football/2021/jan/16/football-index-clients-money-could-be-trapped-after-drop-in-players-share-price
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Report stroodle January 23, 2021 7:43 PM GMT
Got out at right time then, only purchased one player at start of last year I think Pulisic, sold him few months ago for 50% profit. Sancho was £15 a good few months ago, now £5 that's a stinger for some Devil
Report JoeMontana March 7, 2021 12:42 AM GMT
Looks like it's finally collapsed. Sancho can now be had for 89p. Plenty going to be wiped out now.
Report Slicer March 7, 2021 9:29 AM GMT
Warnings about this a long time ago. All these Index type bets are fraught with danger some companies in particular! Hope no one lost too much!
Report morpteh mackem March 7, 2021 11:03 AM GMT
on sunderland fan forum but might be worth a quick read
https://www.readytogo.net/smb/threads/football-index-a-warning-cautionary-tale-for-football-fans.1544040/
Report JoeMontana March 7, 2021 11:47 AM GMT
The whole thing was fascinating and plenty of the users were completely deluded. It was pointed out to them endlessly that the entire business model was whether intentionally from the start or not essentially a Ponzi and completely reliant on a constant stream of new users to pay the dividends of the early adopters but they just wouldn't have it. It was basically a cult. Thousands are going to have lost serious money but those who were in early will have made plenty if they got out in time.
Report DirkDiggler March 7, 2021 1:58 PM GMT
That's exactly what it was Joe, Caan Berry nailed this months ago. And even if you had never used FI, you only had to look at the business model and t's and c's to see exactly what it was.
Report JoeMontana March 7, 2021 2:17 PM GMT
So many of them treated it as an investment, talking about their "portfolios". It was also presented this way in their marketing which plenty fell for. As you say people such as Berry (and plenty more months before he got involved) warned them that these "shares" had no intrinsic value. They were only backed by the promise of FI paying dividends which could be altered at any time, decimating their value, but they were were blinded by the green on their account. That's another story as the numbers as presented were deliberately deceiving with no way to display what could actually be realised at any point in time. Shows how gullible people can be but also incredible the regulators allowed this to even be set up, they clearly didn't understand the business.
Report DirkDiggler March 7, 2021 2:28 PM GMT
Yes the regulators have a lot to answer for. When I took a look at it last year, on top of the "shares" clearly being worthless, how they gained or lost value seemed to be open to manipulation and in some cases ie level of media profile, transfer speculation etc wasn't even quantifiable in any meaningful way and again totally open to manipulation. It was definitely smart marketing, and of course people were blinded by green they were never going to be able to realise. Then of course when warnings are given, people who are heavily invested financially become emotionally invested too, and then Stockholm Syndrome takes over.
Report JoeMontana March 7, 2021 2:35 PM GMT
True, they were in so deep they had no choice but to believe. Then again though having had a look on twitter, incredibly some still seem to think there's a "great product" there if run by the right people. Still don't get it.
Report JoeMontana March 7, 2021 2:38 PM GMT
On another note this is probably bad news for those of us worried about affordability checks. This is going to look very bad for the gambling industry as it appears people have been allowed to deposit their entire net worth in some cases into this thing. There are plenty of six figure losses about to be realised from people who surely can't actually afford that. There's no way they were doing the proper checks on these accounts surely.
Report DirkDiggler March 7, 2021 3:01 PM GMT
I'm not sure what responsibilities FI had re: deposits. I doubt they had any.
Report Jumping-cuckoo-monk March 7, 2021 6:07 PM GMT
Where's the money gone?
Report JoeMontana March 7, 2021 6:50 PM GMT
Plenty will have gone into the founders pockets but basically the Ponzi has finally unraveled. Must have spent plenty sponsoring 2 Championship clubs, also over the last year had lots of rebate and increased dividend promotions to try and keep enough money rolling in to keep it afloat but it was never enough. Their daily commissions are far smaller than the dividends they were paying out and until they changed the rules again they couldn't "mint" new shares.
Report tobermory March 7, 2021 9:08 PM GMT
Football Index's advice to it's 'investors'....

"Firstly, anyone who is concerned about their well-being, or the well-being of another user should consider the resources available on our Safer Gambling page or these mental health resources."

Scared
Report tobermory March 7, 2021 9:11 PM GMT
"We would also like to stress that while we are aware of the fact that our latest announcement proved upsetting for many of you, we have a zero-tolerance policy with regards to abuse and threats to our employees. Any such behaviour will not be tolerated, and we will pursue all necessary measures should they arise."

Surprised
Report tobermory March 7, 2021 9:12 PM GMT
So basically

'your money is gone, if that upsets you phone the samaritans'
Report scandanavian_haven March 7, 2021 10:48 PM GMT
useless mugs.
Report JoeMontana March 7, 2021 11:21 PM GMT
They really were mugs. Any glance at their model told you this wasn't viable but anybody who tried to warn them was derided. Lots of them were very unpleasant. Even now some are still saying "the concept" is good, still can't see it.
Report DirkDiggler March 8, 2021 12:33 AM GMT
Sounds like the final stages of denial.
Report Jumping-cuckoo-monk March 8, 2021 10:43 AM GMT
Someone asked on another site whether it was worth buying the shares now because they are so cheap Crazy
Report shiny new shoes please March 8, 2021 1:17 PM GMT
Debt recovery 50% Devil
Report tobermory March 9, 2021 2:49 AM GMT
Amazing they still have a forum open

https://forums.footballindex.co.uk/category/2/general-trading-discussion



Seem some naive people on there. One guy saying they just need to make Martin Lewis - the Money Saving Expert guy - aware that they've been ripped off and he will launch a crusade to get their money back Plain
Report tobermory March 9, 2021 2:51 AM GMT
One guy posting a six figure loss, his life savings apparently Sad

https://twitter.com/SiFI50065872/status/1368613402638180361
Report sparrow March 9, 2021 12:05 PM GMT
One born every day, even more so these days it seems.
Report n88uk March 9, 2021 12:19 PM GMT
Having seen this on adverts before must say I've never actually understood what it's about and its allure. It was presented like shares in players, but in real terms they don't exist so you're investing in something intrinsically has no value, so can some actually explain it? I find it real difficult why anyone would be ploughing their life savings into something like this, like what is the actual value of your holdings meant to be exactly? That somebody else will buy the worthless shares you hold at higher price?

Wonder how much they benefited from the likes of Bitcoin and the investment craze that has seen lots of investments spike an unbelievable amount in the last year (eg. stuff like Pokemon cards).
Report scandanavian_haven March 9, 2021 12:24 PM GMT
wtf is pokemon cards all about, I've seen stuff on it on youtube, seems like something open to manipulation if some cards are more valuable than others, rogue employees etc, Idk, why are cards so valuable anyway, beats meConfused
Report n88uk March 9, 2021 12:31 PM GMT
People wanting the original first edition of stuff from nostalgia as a child. The prices they've been selling at you've probs heard about likely aren't sustainable, but it's like any collectible. It's like the early like Star Wars collectibles are worth a fortune today.
Report n88uk March 9, 2021 12:32 PM GMT
Famous YouTubers plugging it has obviously helped, but that's like how Elon Musk plugging things also sees its share price go up.
Report scandanavian_haven March 9, 2021 12:47 PM GMT
Kids today earning 10k a month streaming themselves playing video games on twitch as well, I'm in the wrong job.
Report bingo bongo March 9, 2021 1:49 PM GMT
I'm just completely baffled by the regulators, the UK gambling commission role in this. People have been betting with FI for years with terms which allow FI to change the payouts of bets placed months or years later.

Is there any other bookmaker allowed to do this? And people are still maybe depositing today and definitely betting today under the same terms! How is this allowed to happen?
Report JoeMontana March 9, 2021 5:19 PM GMT
n88uk that's it effectively, buying pretend shares in a player.

They were backed by "dividends" which were payouts worth pennies based on media coverage and performance but as seen the T&Cs always allowed them to change the amounts at 30 days notice. Plenty fell for the misleading advertising presenting it as an alternative to the stock market, they always refer to the customers as traders and use terms such as portfolio, shares and dividends. To make these dividends worth winning people had to stake thousands.

It's hard top have too much sympathy with a lot of them though as anyone who was followed this for the last couple of years will know plenty of people saw through this and warned them it was essentially a Ponzi and couldn't work and were always met with abuse. And even now lots of them still don't seem to get it and are continuing to reinvest their dividends and even deposit more so they're going to lose the lot.

They seemed to think they were genius traders because their portfolios were all green. It was impossible to lose at the beginning as all players were rising although even that was deceptive as actual values you could get out at were never (and still aren't) displayed, only the prices you could buy more at.

Those who were in early and had the sense to get out will have done very well though.

The GC surely didn't understand the business or surely it would never have been licensed.
Report roache March 9, 2021 10:47 PM GMT
Any shares bought also only had a 3 year lifespan until they were completely worthless
Report n88uk March 10, 2021 1:16 AM GMT
Does seem the GC have a lot to answer for. On my research today reading about it there's some elements that remind me of Full Tilt Poker, the terminology used in the drastic decrease in dividends reminds me of their language when their cash flow was low, and it seems quite obvious from that FI's cash flow was running low and evaporating fast.

Must say I still don't really understand what the attraction to it was. I obviously saw it advertised during football and it never appealed, and I'm seeing people today saying the model is great, they've just f**ked it up, I don't get it though, ultimately you are holding something with no true value, given the market isn't properly regulated, that seems a disaster waiting to happen. Some will compare it to say Bitcoin, but a cryptocurrency has an actual use and niche even if there are risks attached, this just seems completely pointless to me. The idea of comparing it to the stock market seems highly dubious too, given a stock nearly always attached to something of real value.
Report shiny new shoes please March 10, 2021 1:21 AM GMT
cryptocurrency has an actual use
55,600..
Report shiny new shoes please March 11, 2021 1:37 PM GMT
CryptoExcitedLaugh
7/2
Safe as houses.
Report loui March 11, 2021 9:48 PM GMT
All.marketa suspended and going into administration I'm hearing.
Report gotitwrong- March 11, 2021 10:29 PM GMT
Never looked on the site before-there is a March promotion "£500 Money back guarantee"-covering losses if a profit not made in first 7 days !
Report loui March 12, 2021 7:40 AM GMT
Platform is suspended until further notice, that March promotion won't be happening. It is finished.
Report morpteh mackem March 12, 2021 9:02 AM GMT
https://www.racingpost.com/news/latest/football-index-suspends-platform-and-...
Report inner city sumo March 12, 2021 12:53 PM GMT
Gambling Commission have very serious questions to answer here. I think anyone involved should be writing to their MP about the GC for a kick off.
Report scandanavian_haven March 12, 2021 1:07 PM GMT
could be some suicidal people out there, how was the money not ringfenced like it is on Betfair in case of something like this ?
Report roache March 12, 2021 1:36 PM GMT
You can bet your bottom dollar the guys at the top have been very well looked after
Report dave1357 March 12, 2021 2:55 PM GMT
^^ almost no gaming companies have ring fenced funds.  That was a conscious gambling commission decision.
Report mrcombustible March 12, 2021 8:15 PM GMT
Fans lose £90m in collapse of Football Index
Gambling regulator accused of being ‘asleep at the wheel’ amid betting firm’s failure
new
Andrew Ellson, Consumer Affairs Correspondent | Ben Ellery
Friday March 12 2021, 5.00pm, The Times
The betting company, founded by Adam Cole, traded imaginary shares in players
The betting company, founded by Adam Cole, traded imaginary shares in players
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Football fans have lost nearly £90 million after a major betting firm collapsed into administration, sparking recriminations over how the company was regulated and accusations that customers have been misled.

Football Index, which promotes itself as “the football stock market”, failed late yesterday evening after a week of turmoil. The Gambling Commission has suspended the company’s betting licence as it announced an investigation into its operations today. The collapse is thought to be the biggest failure of a gambling business in British history.

Customers expressed fury and disbelief at the collapse and said they felt betrayed, with some reporting that they had lost more than £100,000. Campaigners accused the Gambling Commission of being “asleep at the wheel”.

The company, which was set up in 2015, allowed customers to buy imaginary “shares” in footballers and offered “dividends” based on player performances and their media profiles. But last weekend it slashed the dividends customers could earn by 82 per cent, triggering a massive slump in the value of players on its market. The price of Bruno Fernandes, the Manchester United midfielder, slumped by more than 80 per cent from £5.62 to £1.10 following the announcement.

Football Index justified the move by referring to its terms and conditions, which state it can make “adverse changes” to dividends with 30 days’ notice and said it was necessary “to ensure the long-term sustainability of the platform”.


A later statement by the company said it was necessary because of “substantial losses” in recent months. In November the company issued a statement saying it had “never been in a stronger financial position” and in January, Mike Bohan, its chief executive, stated that he was “extremely excited about our 2021 plans”.

Tweets from him and the company’s founder over the past year were filled with rocket emojis, suggesting the value of the stock market was “going to the moon”. Customers say these statements gave them confidence to buy more shares in players, money they have now lost.

The price of Bruno Fernandes, the Manchester United midfielder and one of the stars of the Premier League, slumped by more than 80 per cent
The price of Bruno Fernandes, the Manchester United midfielder and one of the stars of the Premier League, slumped by more than 80 per cent
POOL VIA REUTERS
Days before the company announced the cut in dividend it also “minted” new shares of players, effectively inviting customers to buy more stakes at values that would soon collapse. The “minting” of shares and a 2 per cent commission on buying and selling on its platform were the company’s two main sources of revenue.

Last night the company released a statement, saying: “The dividend restructure . . . was a necessary step in a business recovery plan to seek the long-term sustainability of the platform. However, it is clear that this has not been well received and we need to find a more agreeable way forward.

SPONSORED


“We are preparing this through an administration with insolvency practitioners Begbies Traynor.”

It added: “Until such time as the administrators are in office, the platform will remain suspended and no trading or payment transactions, such as deposits and withdrawals, will be possible.”

The company said that its aim was to “continue the platform in a restructured form”. However, the withdrawal of its betting licence and the investigation by the Gambling Commission suggests that may now be unlikely, effectively wiping out the value of shares in players, which collectively stood at £87.8 million as recently as a week ago, according to analysis by FI Market Cap. A further unknown amount is held by customers in cash deposits.

The company said this money was held in a “segregated account” but it was unclear when customers would be able to withdraw their cash.

While Football Index is reported to have more than half a million registered users, only about 30,000 are thought to be regular traders, suggesting average losses of nearly £3,000 each.

When the dividend cut was first announced, many customers accused Football Index of destroying the value in the market to limit its liabilities. Over the course of the 2019-20 season it paid out dividends of £11 million. Some have also accused the company of being a “Ponzi scheme” because they believe it was reliant on attracting new customers to pay out the dividends to existing players.

The Times has spoken to a Football Index employee who appeared to support this. He did not want to be identified but said: “It seemed that towards the end the company was operating like a pyramid scheme. I’m sure that’s not what the company’s original intentions were but that’s what it became.

“It constantly needed new money from deposits coming in to make the platform viable. When people stopped signing up it was impossible for that to keep going.

“It was a series of mistakes from senior management. Mike Bohan, the CEO, is really nice. He took over from the founder, Adam Cole, and the hope was it would be a bit of a relaunch after things had got rocky for Adam.

“At first customers were happy with his leadership but things started going badly. The dividend cut ended up being the nail in the coffin.”

He added: “It felt like we were kept in the dark about things. We weren’t told about big decisions — like the cut — until they happened on the day.”

The Times has also seen a warning letter sent to the Gambling Commission in December in which an experienced trader on Betfair, the online gambling company, urged the regulator to investigate Football Index, warning that its current model is “closely aligned to a Ponzi scheme”. The letter also accuses the company of using “extremely misleading” language.

Football Index has denied operating anything akin to a Ponzi scheme.

Companies House records show that Andrew Burns,the chief financial officer at Football Index, resigned as a director a day before the dividend cut was announced. It was unclear whether he is still working for the company. He did not respond to a request to comment.

Gambling campaigners say the company’s collapse highlights the deficiencies of gambling regulations. Football Index promoted itself as being regulated by the Gambling Commission but the commission would only state that its regulation of the company was restricted to “its provision of remote general betting to consumers”. This suggests that the buying and selling of shares in players was unregulated or should have come under the supervision of the Financial Conduct Authority.

Matt Zarb-Cousin of the Clean Up Gambling campaign, said: “If the remote general betting licence Football Index were trading off covered their main product, then it should never have been licensed by the Gambling Commission as clearly this business model is unsustainable. But if their main product didn’t fall under the jurisdiction of the Gambling Commission, then it was an unregulated form of betting. This constitutes illegal gambling, and so action should have been taken to close it down. The regulator is culpable either way.”

He added: “Both the Gambling Commission and DCMS [Department of Culture, Media and Sport] have been asleep at the wheel. There are now very serious questions to answer about why this product was licensed in the first place, and why they did not respond earlier to warnings.”

Football Index was approached for comment but has not yet replied. In previous statements, the company has denied misleading customers. It has said that the board decided to continue “business as usual” until a new plan was agreed and adopted because it considered that this would be “less disruptive to and in the best interests of stakeholders”.

It added: “Once it was clear that the reduction and restructure of dividends to the degree announced was necessary, we suspended placing issuance orders and announced the reduction and restructure to customers as soon as reasonably practicable . . . There was no intent to mislead customers.”

A spokesman for the Gambling Commission said: “When the Gambling Commission licenses an operator we look at suitability, including their financial circumstances, but we do not oversee their businesses on a day-to-day basis or monitor the financial health of operators directly in real time. That would impose significant regulatory costs and could give a false sense of security to customers.”

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Report scandanavian_haven March 12, 2021 11:33 PM GMT
the more you read about these people at football index the more you realise just what absolute cretins they are.
Report shiny new shoes please March 13, 2021 1:22 AM GMT
we regulate any stealing of  property
gotta be handy with the steel
if you know what I mean.....
Report n88uk March 13, 2021 2:24 AM GMT

Mar 12, 2021 -- 5:33PM, scandanavian_haven wrote:


the more you read about these people at football index the more you realise just what absolute cretins they are.


As someone that's only come in on the story at the end the more I read I'm also struggling to see how more didn't see through it. Like the guy who sent out all the warnings in like December that it was a scam, and yet was apparently battered by the majority of people at the time.

Could have a knock on effect I imagine that could have an adverse effect the industry as a whole. Seems obvious the gambling commission has f*cked up, and their could be reprimands and consequences for that. Though of course ultimately those that have perpetrated this fraud are bound to get away scot free with their millions banked.

Report politicspunter March 13, 2021 9:42 PM GMT
https://www.bbc.co.uk/sport/football/56378282

It's bizarre that folks fall for this hokum.
Report ihal essex March 14, 2021 9:40 AM GMT
Squeaky-clean John Motson staying stum, any comment from the company's chief cheerleader?
Report Storm Alert March 15, 2021 9:21 AM GMT
JoeMontana 07 Mar 21 11:47 ...the entire business model was whether intentionally from the start or not essentially a Ponzi and completely reliant on a constant stream of new users to pay the dividends of the early adopters...

Spot on, Sad thing was it generated plenty of excitement in the early days, I hope footie fans didn't get too heavily involved, the potential loss figures seem high.

As usual the Gambling Commission "were gone to lunch". The present UK government choice of the regulator for the gambling industry and one of the most useless organisations in the UK. First sentence sums them up:
https://beta.gamblingcommission.gov.uk/public-and-players/guide/complain-about-a-gambling-business
Report longbridge March 15, 2021 7:10 PM GMT
"Matt Zarb-Cousin of the Clean Up Gambling campaign, said: “If the remote general betting licence Football Index were trading off covered their main product, then it should never have been licensed by the Gambling Commission as clearly this business model is unsustainable. But if their main product didn’t fall under the jurisdiction of the Gambling Commission, then it was an unregulated form of betting. This constitutes illegal gambling, and so action should have been taken to close it down. The regulator is culpable either way.”"

I cannot disagree in any way.
Report DIE LINKE March 16, 2021 12:28 PM GMT
Sancho reached £13 at the same time you could buy a share in the entire club for a Lady Godiva.
Report FIGJAM March 16, 2021 6:16 PM GMT
Caan Berry aka Geeks Toy should get some acknowledgement writing to the Gambling Commission on the
11th of December 2020 in regard to the Ponzi(Pyramid) scheme.
Naturally it was ignored, but he did put out to the world by doing so.
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