Brokers are known for making overblown claims about almost anything, but a court hearing settling a dispute between bitter rivals BGC and Terry Smith's Tullett Prebon yesterday shows just how far they are prepared to go.
Tullett had admitted in the New York American Arbitration Court that some of its brokers had used data supplied by BGC after a licensing deal between the two firms had come to an end.
BGC's offshoot, Cantor, told the court it had suffered damages in the "hundreds of millions of dollars". The arbitrator did not agree. In fact, far from awarding BGC millions of dollars in compensation, the arbitrator made Tullett pay $789,998 (£500,000).
That was much less than even Mr Smith had been expecting to pay, having set aside £12.4m in its recent results to cover this and two other legal actions.
In the court documents it is revealed that when BGC began the legal action it claimed the data it had provided to Tullett was worth $4,500 per broker using it per day. Later it changed this to $500 a day.
At the arbitration hearing, one of the witnesses was asked: "How did you come up with the $500 figure?" and replied: "Well, pretty much out of thin air, to be honest."
In fact, the arbitrator found, the data had been previously charged at between $9.50 and $15.50 per broker per day. The court said there was no justification for Cantor to claim damages which were 30-50 times the actual probable loss.
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