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Are our funds 100% ring fenced ??
Are our funds 100% ring fenced ??
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I just came back to read some of the responses here and see that there has been a mix of quality in those responses (including the obligatory lawyer bashing). My forehead is now swollen from banging my keyboard and screen in frustration :P
To be very clear: (1) Nno money on deposit anywhere is 100% safe because banks can go bust though I believe we have done all we can to "100% ring-fence" and protect client funds, spread risk and make good investment decisions. If you're not happy take your money out - bury it somewhere in WA if you want - no really - go ahead. (2) We do have a madate for the investment of client funds that is managed by our Finance Team. I've asked and they would rather not share that with the world. If not convinced see my final sentence in numbered paragraph 1 above. (3) We do make interest on client funds. If someone on Helpdesk (or similar level of authority) has said differently they are wrong and should be corrected. As previously mentioned we have considered paying interest back to customers but we can't or we'd require (very onerous) FSA regulation. So we keep the money and use it to offset transfer changes/foreign currency exchange risk etc then we sure do pocket any profit (do let me know if some other bookies are paying interest on funds they hold in their company accounts). (4) Group companies are also beneficiaries of the trust to the tune of the funds owed to them in fees for the services they provide. This is why they take out funds each month and the trust deed explains this. It makes it pretty clear that the trustee can take customer money to pay for the fees incurred to group companies. What can't happen (without fraud etc) is that the company just takes (say for some alterior purpose) money from the trust in excess of what is owed to group companies. (5) I believe I have responded to the independent trustee point. We've looked at this and it has been resolved as I've mentioned. I have set out below verbatim an email I sent several years ago - I spoke to the person and she basically said that having independent trustees was not without complications and in the the circumstances it wasn't the right move. I'll revisit this if anyone out there has a better idea and some people who are prepared to perform the role who are better suited than Ed and Morana (as previously mentioned). Though ultimately if you're still into conspiracy and assuming Betfair is going to screw you and take your client money please refer to the final sentence of numbered paragraph 1 above. From: Justin Hubble Sent: Monday, October 13, 2008 12:46 PM To: XXXX.co.uk' Subject: Independent trustee services XXX, I was given your name by our solicitors (Freshfields). Our trustee company TSE (Clients) Limited holds considerable sums in trust relating to our customers (about £220m). At present the directors of the trustee company (which is a wholly owned subsidiary of the group parent companies) are key individual shareholders of the group’s business. We are interested in ensuring that our customer funds are protected and properly administered in a fair an independent fashion. It may be that an independent board of trustees could assist us. I’d very much like a chance to discuss the situation with you whether by phone or in person with a view to seeing whether the Law Debenture Trust Corporation could assist us. Please let me know when would be a good time for you. Kind regards, Justin Hubble LLM Head of Legal |
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Nemesis, I have a question for you, but would firt like to say that I am not concered about my money here and don't think there is any reason at the moment for anyone to fear for their funds.
The question is : If the bank/banks where our ringfenced money are kept went bust, would we still have a legal claim for our money against Betfair or is our contract regarding our funds between us and the bank/banks ? |
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@Eddie
If the banks went bust you would only have a claim against Betfair if you could show that Betfair acted improperly such as by (negligently) putting the money with banks that were clearly shakey. If the trustees made perfectly legitimate decisions in relation to the funds they would be in the clear i.e. customers would not have a claim against them and they'd need to look to the bank(s). So to be clear the answer to your question is "no - you would not have a legal claim against the trustees unless you could show negligence". However: (1) You may be able to trace the funds that the bank lost to their ultimate recipient and get them back that way. We/you would argue that the funds in question did not form part of the bank's assets because they are subject to the trust (i.e. we would try to stop the bank's liquidators taking the money and claw it back to give to customers). (2) For reputational reasons, even if entirely without fault, Betfair may elect to make good out of its own funds (assuming it hadn't also lost those when the banks went under). It would be under no obligation to do so though if you recall what happened in the case of Sporting Options you'll have some idea how we think about such things. Put very simply it is a really bad scene if (all) the banks in which client funds are held go bust and there isn't a great deal that can be done about this - whereas Betfair going bust is a much better situation for customers to be in so far as getting their money back is concerned. I hope that adequately answers your question. |
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Thank you for a fast and honest reply and as things are now I feel sure Betfair would feel responsibel for their customers money, but in the future if Betfair go on a decline it's good to know where we stand.
We have probably agreed to this sometime when we accepted terms, but I think close to 0 % of your customers were aware of the fact that you are not obliged to pay out our money if the bank/banks where our money is held went bust. |
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And I suppose Betfair don't use the same bank/banks for it's money (£ 155 millions) as they use to ringfence our money(£ 305 millions)
If you are I would recommend you change that policy as fast as possible ! |
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You stated the following on another thread about beating the clock on the General Forum made on 23 July 11 at 15.24
"about BF;s license in OZ specifically prevents them trading in their own markets (so I understand). Next time there is an international game at the WACA I might go down and see if it is happening here." 23 Jul 11 10:58 Joined: 21 Dec 10 | Topic/replies: 227 | Blogger: U.A.'s blog I think you are being a bit too simplistic. For starters if you had a fund of £X gazillion pounds as a trustee you are sure as hell going to take Independent Financial Advice as to what to do with that money. Given that returns on the money is not important it is the security of that money the IFA is certainly not going to recommend that the overwhelming majority of this money does not go into anything but the most secure of investments. Afterwards you are within the realms of the FSA and all of their regulations. As well as this you have the person who created the trust saying that the funds are 100% ringfenced. Unless you can get them to give you the money and you bury it out in a desert in Western Australia the location of which only you know, you are not going to get much more assurance than what you already have that your money is safe. UA, you must be the proud possessor of a time machine, because my post was made 5 hours after you made your WA reference. Its rather more plausible you are a BF employee and you peeked at my personal details. |
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Justin is sounding less like a lawyer every minute and more like a very frustrated person unbelieving at the total general idiocy of many of the argument points being raised on here.
And you know what ? I don't blame him for a minute, though I might think his BoD might not perhaps feel that he is being overly wise in even acknowledging the legitimacy of aome of them, by responding at all. I'm in fact a bit surprised that his last detailed response ever even happened. |
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true fafh, its refreshing to hear from someone that does know whats what like jason and I love how the moaners flee and fluster in his quake lol
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nothing like a bit of authority to calm the masses!
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UA
Many of us on here have been fully aware of pxb's location for a long time, either indirectly deducing ir from many comments he has made on here, and/or also from his direct references to it. I remember once for example he complained about BF not puttung up markets referring to the exact time zone in Australia he was looking at the BF screen from and so on and so on. In fact truth be told I think he lives in some make believe world going by the name of Walter Mitty. |
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Seems to be the opposite though on here Bff, which just shows the absolute myopia many on here have when addressing any and all BF related issues,
Their bias and total ignorance of what they are talking about is breathtaking. |
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If you're not happy take your money out - bury it somewhere in WA if you want - no really - go ahead.
Nemesis, curious you would make the same geographic reference directed at me as UA. Banks going bust is still the same red herring. The substantive issue which you avoided, is what constraints exist on the trust making investments in BF's business activities. That is where the main risk exists. The other significant issue which you have also avoided is that BF receives all the gains (profits) from the trust but customers bear all the loses. What constraints exist on the trust as far the level of risk of its investments. I'll hazard the answer to both questions is 'None'. And as for your suggestion above, I have already started transfering my funds to fields somewhat greener than the red dust of outback WA. Finally, the disdain you have shown for your customer's genuine concerns in this thread speaks volumes about BF's corporate culture. |
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I know, it amazes me how little i knew about any logical arguement concerning an exchange and its issues when conversing with the boffins on here, a large section of roomies on here have led me to the virtues of the lemming and I have been looking at where all the local cliffs are and there heights now summer is in full swing
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Not always though, that is when they talk about and stick to technical gambling matters they make many good points that BF should take on board, but at most other times they go completely off the rails seemingly driven by some intense personal, irrational hatred of BF.
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I absolutely reat my case on pxb though.
He is as mad as a march hare. |
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"--- rest my case on pxb---"
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I agree totally, there are raised some really relavant issues on here and thats when some constructive critisism can emerge, but there are some that make you feel your just banging your head against a wall just because they must know everything better, debate for them just gets in the way of something that turns into a good "lie down and talk to the shrink session" which I dont have the time for(discounting the time I waste on here of course).[;)]
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if they dont like betfair then what the bloody hell are they doing on here!
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cant work pxb out, does he like marmite or hate it, do they have marmite over there even, maybe its in his account details, hmmm
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If I wasn't on BF doing other things betting wise a lot of the time, then the forum would be a total waste.
However, I do find it quite illuminating at times and have in fact learnt quite a few very interesting things from reading it. But what you have to wade through to get to this nuggets of gold is pretty unbelievable. And to a large extent, in my case, the pain is self-induced by my being unable to resist pulling so many of their chains so regularly. A very bad personal fault of mine, not only on here but everywhere else in general, I have to admit. |
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Vegemite not marmite.
Don't try taking on a nation bff. |
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We do have a madate for the investment of client funds that is managed by our Finance Team
justin, could you please clear this issue up regarding your australian customers. the tasmanian legislation for betfair states - (b) the wagering funds of registered players must be held in trust by the licensed provider (or by an agent of the licensed provider approved by the Commission) and must not be disbursed or otherwise dealt with except as authorised under this Act or as the Commission, by instrument in writing, from time to time authorises; (c) for the purposes of paragraph (b), an account used for the licensed provider's Tasmanian betting exchange operations must – (i) not be used for any other purposes; and (ii) be maintained with an authorised deposit-taking institution that carries on business in Australia, at a branch or office of that institution that is physically located in Tasmania; and (iii) be independently audited at least once every 12 months, and at such other times as the Commission may instruct; thanks. |
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Ffs.
Just read his posts iz. |
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thanks for your contribution fafh.......
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Sporting Options......
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@pxb
Answers: (1) I read the reference to burying money in WA and elected to use that example. (2) Trust money is not invested in Betfair business activities. It is invested in low risk investments in a wide range of areas in line with the mandate Finance use for trust fund investment decisions. (3) As I have repeated said: Betfair does receive gains from interest on customer funds - but I fail to see how customers suffer losses. What losses? If you mean the losses in the hypothetical scenario that all the banks go bust then yes of course that is a risk and I believe I've been pretty clear in explaining that (as well as the possible consequences). The constraints on the trust are in the mandate document that Finance use to make investments and no you can't see that. As to the suggestion that I have somehow shown disdain for Betfair's customers genuine concerns I am truly perplexed. In fact I am gobsmacked. I have gone to quite some trouble to respond fully and fairly to those very concerns precisely because I do care about customer concerns - specifically here allaying them and seeing that they don't result in myth. I have shown no distain whatsoever though I certainly now see a possible reason why other senior managers have elected not to wade into the forums to spend time negating unfounded fears. I shall not lightly do so again. |
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Regarding (3), he could mean losses that could incure if these low risk investments suddenly went awfully wrong.
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Nemesis.
Point 2, irrelevant (and you know it) The issue is what in the trust doc prevents such investments. Point 3, doubtless in some narrow sense this is true. You are after all a lawyer. However, you have already stated 'We do make interest on client funds'. Client funds invested in the safest of investments will be generating well in excess of 10 million a year and if it doesn't go to customers and it doesn't go to Betfair, where does it go? And as for, but I fail to see how customers suffer losses All investments without exception carry the risk of loss of part or all of the investment. Its late here and you are clearly not interested in answering substantive questions. And I'm waiting for a response from the Tasmania GC to several of these questions. |
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@pxb
I should have remembered the saying: Do not argue with an idiot. He will drag you down to his level and beat you with experience. |
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PXB - you seem to have a fixation on people tapping into your account and finding info out about you, and betfair secretly planning to steal all your money. Ah the conspiracy theories, oh how they make it so exciting, do you feel really important, thinking people are moitoring you. Let's face it no-one is monitoring you no-one cares, no-one........oh cr@p, Nemesis may have named himself after a ride at Thorpe Park but he's right, why bother.
Just relax and get yourself down Cottesloe. No-one is monitoring you. |
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Nemesis was a she ?
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And pxb please stay down for your own good self.
You're punching above your weight on this. |
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@pxb
I should have remembered the saying: Do not argue with an idiot. He will drag you down to his level and beat you with experience. nemesis thats one of my favorite sayings along with "theres no fool quite like a sure fool" which angles along the plane that those that cant change there mind don't have one to change. |
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we can learn much from the simple common tree because if we don't bend with the wind of change, then we may easily be blown down and uprooted!
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(2) We do have a madate for the investment of client funds that is managed by our Finance Team. I've asked and they would rather not share that with the world. If not convinced see my final sentence in numbered paragraph 1 above.
---------------- for all the chaff and scaremongering, this imo is the substantive issue that remains here. on what grounds do they not wish to share the mandate? no one's asking for them to disclose specific investment strategies, merely what level of risk is deemed acceptable when investing large amounts of other people's money. |
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I think the statement made in the first post by Mr Hubble that funds are invested in low yielding deposits in a wide array AA + banks is adequate info for any reasonable person.
Unless he is blatantly lying this means that they are not running some sort of high yielding investment operation in the trust fund. Do you perhaps think that GS ( its prime underwriter wasn't it) is selling them high yield derivatives or something exotic like that ? Do you think they're speculating in FX ? what exactly is even of potential concern to you ? |
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FAFH, you're turning more and more into an automated Betfair defender and no start to say things you surely can't mean or do you think it's ok to keep the investing mandate a secret to those who own the funds and take all the risks with these investments ?
I don't think Betfair are taking high risk with our money, but there is imo no reason to keep the the investing mandate a secret to us, in fact I even doubt if it's legal to keep it a secret unless we have specificially agreed to it when accepting their t & c's. |
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my concern is there's a clear, albeit currently latent, conflict of interest, which BF aren't addressing.
BF takes all the interest on these investments whilst providing only a proportion of the capital. it's effectively in a highly leveraged position thanks to other people's money. at the moment, given its cash pile and profitable status, that conflict is latent because they have a far greater interest in the security of the investments than in maximising the return on them. but in changed circumstances that would not necessarily be the case. therefore it would make sense for them to have clear explicit protections written into the trust deeds to prevent such a situation arising and dispel any lack confidence in customers whose money they are investing. please note: I'm not accusing anyone of anything, either explicitly or by innuendo. a conflict of interest is purely a structural state of affairs, not an act of wrongdoing on anyone's part. |
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Covering yourself against a banning eh viva?
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OK Viva.
Give me an example of the sort of conflict of interest that you could even conceptually see arising to the trustees in investing funds in a range of low yielding deposits in AA+ banks ?. Also , to bring all this down to a practical day to day level, does any of this even remotely affect your comfort level re putting your funds with BF and gambling with them, as opposed to putting them with another competitor and gambling with them there ? And if it doesn't, then why on earth are you bringing it up ? |