The City Diary: IG's High Court silence

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The Independent Online

I'll begin with IG Group, the granddaddy of the financial spread-betting industry, which was forced to push out a short announcement last week about a €25m High Court claim on the company.

It all related to the insolvency of Echelon Wealth Management, a former IG client, and the spread-better's statement quickly dismissed the likely impact of the "speculative" claim. That was about all it was prepared to say on the matter, but the court documents go a lot further, alleging Echelon had a "white label agreement" whereby it received commissions for trades placed by its clients with IG. Furthermore, the three claimants – a Swiss investor called Lucien Selce and two investment companies, Stokors and Phoenicia – are pursuing damages after losing cash they believed Echelon had ring-fenced in segregated IG deposit accounts, only for those funds to be used to cover other Echelon clients' losses.

It all looks like a mess, but the FTSE 250 group remains confident there is no case to answer. A spokesman says: "IG has no contractual relationship with the claimants." Developing...

Joe Bloggs link

In an intriguing footnote, the documents also record who the claimants believe was making the losses. "On or about April 2008, Echelon opened a sub-account with IG Markets numbered E4376," they record. "The nominal sub-account holder and client of Echelon for this sub-account was Ranjit Singh, but in fact it was operated by Echelon on the instructions of and for the benefit of Eaitisham (Shami) Ahmed". That would be the same Shami Ahmed who founded the Joe Bloggs clothing brand, before being forced into personal bankruptcy last year by spread-betting firms chasing him for millions of pounds. Ahmed denies the "Ranjit Singh account" was under his control adding that he has also lost out. Shares in Ahmed's firm, Legendary Investments, were suspended in 2008 because Echelon was holding £600,000 of the group's cash. I don't think we've heard the end of all this.

FA upfront on gender

I hear various City grandees are being approached by the Football Association's headhunters to apply for the vacant chairman's role, boss of men such as Stephen Gerrard. Will they be put off by the FA's intrusive equal opportunities questionnaire? It asks: "What is your gender?" before probing: "If you are currently undergoing the process of gender reassignment, please tick your future gender."

Hunt as honest broker

The Culture Secretary, Jeremy Hunt, is being forced to judge the size of the annual horse-racing levy, paid by bookmakers to the horse industry, after the two warring sides failed to agree between themselves. The Bookmakers' Committee, representing the leading chains including "William Hill, Labdrokes [sic], Gala Coral and Betfair", released a joint briefing document on Friday outlining their case – an unusual outbreak of solidarity. It is thought that this impasse has been arrived at after William Hill blocked a £75m package that its three rivals wanted to offer. "A deal could have been done," confirms my mole, "but it got blocked."