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Are our funds 100% ring fenced ??
Are our funds 100% ring fenced ??
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Replies: 241
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who ever betfair choose for the new ceo , i hope he has character and flair and a good public relations profile, would settle for anyone with an once of what steve jobs or bill gates are made of
one cant fault there business prowess, but above all else i hope he has a human heart and a likeness to nurture the betfair model that we all, regardless of our gripes and woes have come to admire and love. and most of all i wish betfair, the staff and all its users much success in the future. |
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For once on here fanatic, I don't know what to say. I'm totally mute. My usual sarcasm would seem to be most inappropriate, unnecessary and unfair.
A crazy, insane story that's indisputable. The entrepreneur in me most certainly bleeds for you. It will be interesting to read others' comments on your tale ( if any are forthcoming). Others perhaps being more knowledgeable and experienced not only in the type of betting activities you are describing, but also the software/computer programming you are describing. |
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Maybe there are even others out there that you could work with to ameliorate the penalistic effects of the latest PC hikes.
There do seem to be ways around it, if not totally, then to a degree to make systems such as yours still reasonably feasible to implement. Keep posing on here and someone may very well come along who is in a position to help you resolve all this and move it all forward successfully. All your hard work does sound very deserving of fair reward. |
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''---Keep posting on here----"
Posing is what I do ? |
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Customers are entitled to a share in that Trust at all times,
I'm afraid that means sweet fa, because bf can withdraw the any and all the customer funds whenever they like. And a share of zero is worth zero. I seem to have missed the story on Australian funds (I'm an Australian). Guess I have to search thru the thread. |
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Couldn't find information on how Australian funds are kept.
Can anyone help? |
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Only 10% of betfair has actually been floated on the stock market, so they aren't going out of business any time soon, no matter what the share price is doing. As long as they continue to make profits they will still be around.
As far as I am aware profits aren't doing that badly compared to when they floated; the problem was they were A) overvalued to start with and B) none of the potential growth has materialized. |
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Won't be 10% much longer if they keep buying them back at the present rate -so far 517,477 have been repurchased,each time they buy it gives the share short temp rise.
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Hello there PXB
You mention that "I'm afraid that means sweet fa, because bf can withdraw the any and all the customer funds whenever they like." Wouldn't they require the Trustees' authority to do this? |
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Betfair won't steal your money, they'll just assist others to steal it.
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@Houchy
I'm afraid you've fundamentally misunderstood a large range of issues. Betfair Group Plc's share price has nothing whatsoever to do with its solvency (or more importantly that of the trustee company holding customer funds). The price could fall to 0.1p and it wouldn't impact the fact that Betfair is a company with no debt, about £155m in its OWN money in company accounts, gross revenues of £318.74m (net profit after paying absolutely everything of £23m) and assets worth who knows what but I'm guessing that technology and brand are worth a pretty penny. See data released on 29 July for these figures on http://corpoate.betfair.com. Compare this to Gala Coral's circa £2 billion of DEBT. Hills hundreds of millions of debt etc. Betfair is in great shape. But quite apart from the fact that Betfair is very solvent, has assets and is making a ton of money the trust account system it runs actually DOES provide a higher degree of protection for customer money than any other bookmaker and IS ring-fenced. The way it works is this. I should know. I designed it. That customer money in trust (say £250m?) that belongs to customers is not on the company books. It is not an asset of the company. It is not in normal company owned accounts. It is in trust and subject to trust no matter where it sits so long as it is in an account of the Trustee (TSE Clients Limited). A portion of trust money IS owned by the companies in the group but only to the extent that it is owned for services provided and this money is "flushed" out periodically. What this means is that even if Betfair went completely bust (which is not remotely close to happening) and the liquidators came knocking that money would not be in an account owned by the company and the beneficiaries of the trust would be entitled to be paid out in full before any creditors and in fact completely independently of any creditors BECAUSE THAT MONEY IS NOT AN ASSET OF THE COMPANY! It just won't form part of what a liquidator can get his or her hands on. Whereas when you put your money with most bookies or service providers (eBay etc) or whatever odds are it goes into a company account that is an asset of the company and therefore subject to being attacked by a liquidator. Added to this is the fact that a trust arrangement is based in the law of equity and this gives beneficiaries of the trust additional rights (look up "tracing" and restitution if you want) that go well beyond what a regular contractual arrangement for the deposit of funds would achieve. Yes - the trustee can invest funds held on trust and does so to spread risk by making deposits with a wide array of (AA+) banks in very low risk (low yeild) investments. Betfair also makes money on this that we did consider giving back to customers back in 2003/2004 until the FSA said that if we did that it would be an investment scheme in need to onerous regulation and that we should therefore keep the interest ourselves to offset against transaction costs incurred on payment cards (which is why many such payments cost customers nothing). Any profit from interest or exchange fluctuations is a bonus - any LOSS from exchange fluctuations is a cost that Betfair takes off its share of trust funds owed to companies in the group. So investment is a good thing and again diminishes the risk of say having it all in one 0% account with one entity. In short you are incorrect to think share price is even relevant to a discussion about the security of funds held on account with Betfair. The company is severely solvent and making good money despite what market sentiment may show of it's perceived value. I'm a shareholder and of course I don't like to see a low share price but I'm not remotely concerned about solvency nor my Betfair account balance. I'm posting this because it irks me to see such nonsense and scare mongering posted here. In general it perplexes me that Betfair has some many frenemies who both love it and slander the living bejesus out of it but that is another story beyond the scope of my post. I hope this information provides a little more clarity on the true position. Justin Hubble, Head of Legal, Betfair.com |
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Excellent post Justin.
If Betfair were more active on threads like this then there wouldn't be nearly so much misinformation. First time I have ever seen a head of any department replying to a post. You should do it more often. |
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Was just about to post the same Rocket.. Thanks for the info Justin and agree with Rocket perhaps more information from official BF reps on the forum would clear the sometimes muddy waters....
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Starting with the Head of Market Operations - perhaps he could explain why there are no Keep Bets in the Correct Score market because 14 months later we still don't know.
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excellent post justin, at last someone who actually knows whats going on and has cleared up the issue
I cant also understand why so many people on the forum love betfair if there honest and yet spend so much time on here spreading mis-trust of the company when the company is doing so well and making tough but sound business decisions for the benefit long term of all its customers and share holders, keep up the good work! |
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Nemesis : I'm posting this because it irks me to see such nonsense and scare mongering posted here. In general it perplexes me that Betfair has some many frenemies who both love it and slander the living bejesus out of it but that is another story beyond the scope of my post.
yes, some people seem to relish slagging off Betfair at every opportunity, presumably whilst they're logged in and placing bets, the hypocrites. Constructive criticism is one thing, but continuous BF bashing is quite another, especially on their own forums which are on the whole very fairly moderated. Not many companies would allow continuous discussions slagging them down and bigging up the opposition. Good post above Justin. |
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Hey Justin,Don't shoot the messenger,i quoted PCPAYER from another thread,and asked for someone to confirm or deny his post.Not my fault so many anxious members posted before you decided to post.After all thats gone on i think it was a reasonable question to ask.
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good posting justin.
the only thing that doesn't clear up for me is: are there any explicit safeguards to prevent the trust investing in less than AA+ investments? whilst most of us (including me) would take it on faith that the trust would never (to quote an example given above) invest in "betfair bingo" or some such, is there anything to explicitly say they can't? |
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well done trev with your reply to jason, noticed you didnt make any sexist remarks to him then, I wonder why yet you clearly do with others!!!!!
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Safeguarding client money etc is all a bit dull.
But "perplexes" is fascinating. |
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now i get it you only accuse people of working for betfair when they stick up for them but if you do work for betfair you mind your manners, I have noted the difference, can a fellow betfair fan not share the same respect towards the company as you do really to there valued staff!
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respect is a wonderful thing but hard to find
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@premiumpayer:
You raise some good points. We've considered having alternate trustees appointed to the board of the trust company. However, we came to the conclusion that if the existing directors could not be trusted (Stephen Morana and Ed Wray both of whom sitting on the plc Board) did something untoward and made off with funds (which as wealthy shareholders they are not likely to do) then customers would probably prefer to go after them (as would we/me/the company) knowing that they'd be personally in the firing line if they had committed any fraud. In other words we rather like knowing who is ultimately responsible for acting as trustee for company funds and think their personal (potential) wealth is both a disincentive for skulduggery as well as a potential pot of funds if things somehow (I honestly can't see how) did go wrong. Probably preferable to farming it out to XYZ Trustees incorporated to do the job instead but if you find someone more reputable and better placed who is prepared to do so I'll talk to them. mind you, nothing changes the fact that precisely because it is an equitable trust arrangement people would have the power to trace funds and get them back from whomever ended up with them. Of course very little can be done about banks going bust - that much is true. Our best bet there has been to spread risk and stick to reputable banks. You mention that the trust deed covers what happens if there is a shortfall in client funds; which is that the [customers] bear that shortfall in the ratio of their holdings. It has to say this as all trust deeds do. But keep in mind that if there was a shortfall it could really only be because of quite serious breaches of duty by Betfair and the trustees and as such beneficiaries would be able to pursue the company (which is loaded) and maybe even the directors (if they were personally responsible) of the trust (again loaded). In all it is not a terrible position to be in in terms of security in these heady times - indeed it is the BEST form of security I've been able to think of. If you're still not comfortable go ahead and take your money out that's your perogative! It's a whole 'nother ball-game than debarcles like Sporting Options/Full-Tilt and Lehmans. |
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^whilst all that makes sense, it's surely also an argument for explicitly mandating the maximum level of risk trust investments can bear and their type.
given that customers whose money is in the trust cannot benefit from interest earned there seems no reason to me not to specifically exclude all but the least risky, and writing that into the deeds would surely dispel any perceived conflict of interest caused by the overlap in personel. |
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In other words we rather like knowing who is ultimately responsible for acting as trustee for company funds and think their personal (potential) wealth is both a disincentive for skulduggery as well as a potential pot of funds if things somehow (I honestly can't see how) did go wrong.
It's not something I worry about Nenesis but I'm sure we all thought the same about Robert Maxwell and yon Farepak guy (no pun on the word fair intended). I think the one thing we can all be sure of is that when the going gets tough the city boys aren't the ones that will be selling their houses and cars. |
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No, they will be going down to the Canary Islands on their luxury yachts instead.
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thank god the staff have got there heads screwed on a lot tighter than some of the forum junkies!
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like jason said before the issue of are funds 100% ring fenced is not one that needs to be constantly brought up as there are no problems what so ever with betfairs finances, there in better shape than ever, and to keep nattering on about the small details involved in the clauses is not productive too the topics that should be brought up on a forum.
I could be classed as scare mongering and looks very much like it to me, betfair always pay there customers even if there making millions and are continually still making millions year on year. close the subject please! |
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so you've programmed the world's leading greyhound system, yet you don't have the precision of mind to get peoples' names right or even spell your own forum name correctly.
[ ] convincing. |
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bf_fanatic's certainly put my mind at rest. I wonder if he was one of the city boys that thought up those packages that eliminated risk?
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I dont always proof my posts and this also happened when entering my forum name, however there is no real link between spelling precision and I.Q. in fact ;
"stistciens roeckn taht as lnog as teh fsrit and lsat ltetres are in the rhigt pclae" then this is all the human brain looks for or needs when reading. q.e.d |
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you only need precision when say writing or coding a 50,000 line program as one error will cause
bugs, hang ups, errors that will crash or prevent the program from executing or working properley writing to me is just a form of communication, if you were important to me I would spend time prfoonig! |
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That said Mr president I find your grammar most impressive so well done.
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Thread title is:
Are our funds 100% ring fenced ?? There are 120 comments related to the topic: Answer winkled out is NO. It is not as if regulated pension trusts have not lost funds to the parent company both in good and bad times. No answer to Betfair being regulated in Gibraltar and trust in English law. Where is overseas customer money held? - no answer. Why should we trust a lawyer - it is not unknown for them to hoodwink clients and misappropriate funds? Why is a lawyer giving financial advice - naive advice at that? Why do Betfair not tell the truth at all times - the funds have never been 100% ring fences? If you want to engender trust, you tell the truth at all times to your customers. |
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Good post cornubia
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You can only ring fence funds in the sense of taking them out of the company's asset base, as nemesis says.
You can never ring fence anything in the sense of absolutely stopping any individuals ( either company directors or totally independent individuals/ entities)who are managing/investing such assets, from undertaking either fraudulent or stupid activities. |
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That customer money in trust (say £250m?) that belongs to customers is not on the company books. It is not an asset of the company. It is not in normal company owned accounts. It is in trust and subject to trust no matter where it sits so long as it is in an account of the Trustee (TSE Clients Limited)
re justin's quote above - if this so, how is it that betfair can access customer's account each wednesday and withdraw large amounts of money via pc. is this a direct transaction between customer/betfair or a transaction between betfair/TSE? who authorizes these transactions? |
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He addresses that at the end of para 5) of his first post, doesn't he ?
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UA
Wouldn't they require the Trustees' authority to do this? The authority is in the Trust doc. |