Registering a bet

Diana Sassoon reports on a debatable use of shareholder lists

HIGH street bookmaker Ladbroke Group is distancing itself from a highly risky punt offered to its 50,000 private shareholders. The gamble has nothing to do with racing animals, or speculation about cup finalists.

An investment firm has been targeting Ladbroke shareholders with offers to speculate in small company shares - including what are called "penny shares" - having got the investor's names from Ladbroke's shareholder register. These are higher risk than investing in larger companies, and you should be prepared to lose any money you stake and not see a dividend.

Steve Devaney, Ladbroke's head of corporate affairs, said: "We have absolutely nothing to do with Park Equity Services. We don't like our share register being used for any form of marketing without our consent. But there's nothing we can do."

Ladbroke plans to send out a letter to shareholders distancing itself from the service with its annual report in the next few weeks.

All company shareholder registers have to be made available, by law, within the public domain. Anyone can obtain them for the price of an administration fee, from Companies House or a share registrar firm. "We aren't greatly in favour of it. But the law says the lists must be compiled and made public,'' said Phil Boyd, senior compliance manager at the Data Protection Registrar.

Mr Boyd says that in other cases questionable practices have taken place: for instance, lists of company directors and shareholders have been run off against the electoral register to compile a new list of rich women living alone, which was then offered to direct marketing agencies.

The offer letter sent to Ladbroke shareholders, came from Tunbridge Wells-based investment company Park Equity Services. PES has mailed Ladbroke's shareholders with an offer of a free stockbroker's report about "Ladbrokes plc''. If the investor requests the free report, they also open themselves to approaches from the company to deal in high-risk penny shares and other small company stocks. The mailing highlights the firm's "commission- free dealing service" and says: "It is in these areas [smaller companies] that investors have made some of their greatest gains."

"It's like using a sprat to catch a mackerel,'' said one industry insider. By accepting the offer for the Ladbroke report, the new client accepts the authorisation buried in the small print for PES to cold-call them with the share offers. Cold-calling for this sort of investment would be illegal, unless the client agrees.

When acquiring new clients, PES is careful to go through an investor factfind, in keeping with regulatory-body Fimbra's rules. Punters should be aware of the high risk of the investment.

But in other areas PES's small print stretches Fimbra's rules to the limit, according to a securities partner of a top city law firm. "The [company's] clause used to cover possible conflicts of interest is as widely drawn as I've ever seen ... It could be used as a licence to profit at the expense of the client," he said.

Some argue that the Fimbra rules under which PES operates lack teeth, compared with those laid down for most other stockbroking firms under the regulation of the Securities and Futures Authority (SFA). Fimbra closed to new members 18 months ago, and is gradually being wound down, with companies like PES being forced to apply for regulation by other bodies. PES has yet to be admitted elsewhere.

It is possible to make money from these investments. But risk warnings cannot be too strong. You should steer clear unless you have money you can afford to lose. And if you do decide to have a flutter, shop around. Try to check the share price with another stockbroker. But it can be difficult to check the performance of an investment firm's recommendations. In the absence of such proof of expertise or value, it may be safer to choose your stockbroker through personal recommendation, or simply bin the mailshot.

PROMOTED VIDEO
News
Teeth should be brushed twice a day to prevent tooth decay
education
News
Bryan Cranston as Walter White, in the acclaimed series 'Breaking Bad'
news
Sport
footballChelsea 6 Maribor 0: Blues warm up for Premier League showdown with stroll in Champions League - but Mourinho is short of strikers
News
Those who were encouraged to walk in a happy manner remembered less negative words
science
Arts and Entertainment
Princess Olga in 'You Can't Get the Staff'
tvReview: The anachronistic aristocrats, it seemed, were just happy to have some attention
News
Renee Zellweger as Bridget Jones
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech

Board creates magnetic field to achieve lift

News
There have been various incidents of social media users inadvertently flouting the law
news

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
News
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
i100
Sport
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Senior Helpdesk Analyst / Service Desk Co-ordinator

£27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

Senior Pensions Administrator

£23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

Corporate Actions Administrator / Operations Administrator

£25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London