I blew £120,000 on risky trading bets: This is how I kept it secret from my family

When Grant Davies went for lunch with a couple of his high-flying friends in 2009, he thought he was going to enjoy a leisurely few hours catching up.

But what he didn’t know was their conversation would spark a gambling addiction that lasted 15 years.

Grant’s friends piqued his interest when they talked about a currency trade they had made that banked them hundreds of pounds. He wondered if he could do the same.

Grant, then in his early 30s and working in financial services, went home and created an account with IG, an online trading platform.

IG is the UK’s largest trading website, which allows users to buy and sell investments such as funds and shares. It also provides access to complex financial trading tools.

That night, Grant, now 48 and a married father of two, made a £300 spread betting trade on the S&P 500 – an index that tracks the shares of 500 of the biggest US firms – and made £600 in just five minutes. He says: ‘I saw how easy it was to make money, just as my friends had said.’

After his first trade, Grant gradually fell into the grip of addiction, especially when he started to suffer losses. ‘There were periods where I would lose money and I fell into the trap of thinking that I needed to make it back. So I just carried on.

‘I didn’t know it but I was falling into an addictive cycle. I kept it all to myself and tried desperately to find more money to win back my losses.’

Grant, who lives in north London, had never gambled before, apart from the odd flutter at work or an occasional sweepstake.

Spread betting is a high-risk way of speculating on whether the price of an asset will move up or down, without actually owning it. It is riskier than conventional trading (it is considered gambling under tax laws) because it typically involves using ‘leverage’. Traders put down just a fraction of the value of the total trade, which can magnify their gains and, of course, their losses.

For example, say you want to place a spread bet on the FTSE 100 index.

Its value is measured in points, so you decide whether you think that will go up or down, and stake, say, £5 a point. If the index is trading at 10,000 points, then your total exposure will be £50,000. But because of leverage, you might only need to deposit 5 per cent of this to open the position, so £2,500. For each point the FTSE100 moves in your favour it is multiplied by your stake. In this example, a 20 point move in the direction you predicted would bring in £100 – 20 multiplied by your £5 stake per point. Likewise, a 20 point move in the opposite direction means a £100 loss.

IG has a warning on its website that says spread bets are ‘complex instruments’, and that they come with a high risk of losing money rapidly due to leverage.

The product that really cemented Grant’s addiction was a trade called ‘binary options’, a type of financial contract that allows investors to make ‘yes’ or ‘no’ wagers on price changes or events.

For example, you could wager that the price of the pound against the dollar will be higher in an hour. Binary option trading was banned in 2019 by the Financial Conduct Authority.

But in 2010, before the ban, Grant was sucked in. ‘I could make a bet that the German stock market, the DAX, would be higher or lower in five minutes than it is now.’

Grant would add £100 to his account and trade until it was gone. But then he’d add another £100… and another. By the end of the week, he was often a couple of thousand pounds down.

He says: ‘I had this misguided belief that I could make the equivalent of a monthly salary out of my wins.’

As his losses mounted, Grant started to miss bill payments and rack up credit card debts. ‘I would miss payments for my lease car,’ he says. ‘There were phone and electricity bills that didn’t get paid, and council tax that went into arrears. I was clearly in trouble.’

Grant stopped making regular trades for a few years when his second child was born, in 2017.

He says it’s likely that he would have never traded again had it not been for an email from IG in 2018, offering him the chance to apply for a professional account. These are meant for experienced traders, as crucial protections for retail investors are removed.

There are several criteria you need to meet to gain access to this type of account, including at least two of the following: a portfolio of more than €500,000; to be working in the finance sector for one year in a position where trading knowledge is required; and having carried out ten significant transactions a quarter over the previous year.

The broker must undertake an assessment of the trader’s expertise, and the trader also needs to understand what it may mean for their wealth if they lose retail protections.

Traders with these accounts are offered access to higher leverage ratios – in other words, they can make larger bets.

The email was sent by IG before new rules came into force in 2018 that restricted the amount of leverage brokers could offer retail investors.

Grant would later argue that he didn’t meet the criteria. But he clicked ‘apply’ – and was approved in three hours.

Looking back, he says this furthered his obsession. ‘It was like a firework going off. Suddenly I could trade relatively small amounts but get potentially enormous returns.’ With his new account, Grant’s addiction took hold again. Over the next six years he would lose £120,000.

It plunged Grant, who now works in marketing technology, into £45,000 of debt via loans and credit cards, which he used to pay his bills when he’d spent his salary on trading. Sometimes he even used credit to fund his trading account.

He says: ‘I was convinced it was an intellectual pursuit. It is dressed up as morally superior to gambling because it doesn’t involve hanging around in bookies.’

Grant’s wife, Melissa, knew he had an interest in trading, but he had been careful to keep his out-of-control habit hidden from her, as well as his friends and family.

‘Some alcoholics hide vodka in water bottles and I was basically doing the same. I managed to conceal most of the trading by moving from one source of debt to another and paying the minimum payments on debts.’

Every once in a while it would emerge that Grant had lost money trading, and there would be an ‘explosion’ between the couple, who have been together 20 years.

Then in June 2024, Grant missed a mortgage payment. ‘I had lost almost all my salary that month, so the mortgage bounced,’ he says. ‘Melissa saw and the game was up. The whole world just kind of fell out from beneath my feet.’

At this point Grant didn’t dare to look at his total losses, but they were £175,000 – of which £120,000 he had lost since he was offered the professional account.

Melissa told Grant he had to ‘sort his life out’ and asked him to go to rehab for one month in 2024. He says: ‘I was there with alcoholics and drug addicts who looked awful and had the same kind of addiction features that I had, but I wasn’t from that world. There was no one who was like me. You’re forced to confront who you are and what you’ve done – and it was awful.’

While trying to think about how to recover, he began researching online. And he found out that he should never have had access to a professional trading account. He began hunting for a way to get redress, and was introduced

to Red Mist, a corporate intelligence agency headed by Seth Freedman and former Barings Bank rogue trader Nick Leeson, by a mutual acquaintance.

They took Grant’s case to IG, but it was ‘rubbished’ by the trading giant. Grant then took his complaint to the Financial Ombudsman Service (FOS), but IG continued to fight back.

He says: ‘IG was waiting until the last possible moment to reply, replying late, giving incomplete information – and then claimed that my complaint wasn’t valid any more as I was out of time.’

But Grant pushed back and the FOS continued to look into the case. ‘IG treated me with so much contempt,’ he says. And finally, in May, the FOS ruled in his favour – that the professional account should never have been approved and it was not ‘an appropriate course of action’.

It said Grant did not sufficiently meet the criteria to be given the account – and that minimal work on IG’s part could have avoided subsequent loss.

The FOS ordered IG to pay Grant three-quarters of the £120,000 he lost since 2018 – more than £90,000. It only awarded three-quarters as the declarations made by Grant when he opened the account ‘contributed to the losses he suffered’. No interest was awarded, but IG was ordered to pay £500 compensation for distress and inconvenience.

However, IG paid this sum into Grant’s original trading account. ‘It’s just disgusting. You might as well give an alcoholic a bottle of unlimited vodka,’ he says.

Fortunately, Grant no longer considers himself an addict – and his account was suspended by IG so he couldn’t make any trades.

With the backing of Red Mist, he is thinking of claiming for psychological damage and harm to his relationships. He has used the money to pay off all his debts, set money aside for his mortgage and put money into his children’s savings accounts.

He says: ‘I’m still rebuilding relationships, but the financial reset has been incredible. I’m living like a normal person.’

A spokesman for IG says: ‘As a matter of policy, we do not comment on the affairs of individual clients or on matters that are the subject of legal proceedings.

‘Accordingly, it would not be appropriate for us to comment on selective characterisations of correspondence relating to an individual case.

‘IG is an FCA-regulated business with more than 50 years’ experience, and we take our regulatory obligations and our responsibilities to clients very seriously.

‘Applications for professional client status are assessed against the eligibility criteria set out in applicable regulation and on the information provided at the time of application.’

Grant’s and Melissa’s names have been changed

And the unlikely hero who helped to get the debt wiped… Barings Bank rogue trader Nick Leeson!

AT FIRST glance, Nick Leeson isn’t the knight in shining armour you may expect to be behind the victory that won back more than £90,000 for indebted trading addict Grant.

After all, Leeson is best known as the former rogue trader responsible for the eventual downfall of Barings Bank.

Leeson worked at the merchant bank as a derivatives trader in Singapore and was labelled a star player – but had hidden some £827million of losses from speculative trades.

He infamously left behind a note that read ‘I’m sorry’ before fleeing to Germany, where he was later arrested.

Leeson was jailed in 1995 and served four years and four months behind bars in Singapore. But now he’s fighting back against giant corporations – and says his experience means he’s perfectly placed to do it.

He joined corporate intelligence firm Red Mist Market Enforcement Unit in 2023 and now probes financial misconduct cases on behalf of people wronged by giant corporations.

He says: ‘I’m approachable as I’ve been through the mill. In pretty much every case I deal with, I’ve been in a far bigger, more embarrassing situation.’

The company is headed by Seth Freedman, who previously worked as an equities broker before joining Black Cube, a private intelligence firm run by former members of Mossad.

Freedman operated as a private spy for now-disgraced Hollywood producer Harvey Weinstein before leaving the firm in 2018 and setting up Red Mist in 2021. Together this unlikely duo fight for compensation for their clients.

They were introduced to Grant by a mutual acquaintance shortly after Grant came out of rehab. Leeson says: ‘I met him at a coffee shop and he was at his lowest. It was quite an emotional day. There’s a lot of therapy in what we do. He told me he didn’t think he’d been wronged and that it was all his fault.

‘But I had to flip that and say IG had a duty to protect you, and financial markets are all about appropriateness and suitability for the client.’

Leeson’s controversial past is one of his strengths as an investigator, says Freedman. ‘If you sit down with Nick, you’re speaking with someone who’s very publicly talked about his own experience.

‘Grant could open up because there’s no stigma or shame sitting in a coffee shop with Nick. It’s the ultimate safe space.’ From the very beginning they were confident IG had wronged Grant.

The team submitted a subject access request to see all information IG held on Grant and put a case together to prove he should never have been allowed access to that professional account.

They first took the case to IG, which rejected the complaint. Then they brought it to the Ombudsman but IG came back with a ‘dismissive’ response and effectively told Grant that his losses were his own fault.

Plus it was ruled Grant was out of time to complain as you have to go to the Ombudsman within six years. But Grant argued that he had only recently become aware of the issue with the professional account, and the Ombudsman decided it would rule after all.

The Ombudsman finally gave its ruling in May – Grant won a payout of more than £90,000 with Leeson and Freedman’s help.

Leeson adds: ‘We’re very dogged and very determined. We’ve had to keep Grant going throughout that process – a lot of people give up on that journey.’

Despite his ferocious pursuit of redress for Grant, Leeson is keen to avoid being labelled a saviour.

He says: ‘It’s very much a commercial enterprise.

‘Lawyers aren’t really equipped to deal with financial investigations, the Financial Conduct Authority has a million other things it is trying to deal with. Seth and I can cut through a lot of the nonsense that you get from some of these organisations.’

Since it started in 2021, Red Mist has had a 100 per cent strike rate – because they never take on a case they don’t think they can win.

And of course, they don’t do it for free. The duo are hush-hush about actual figures but say they are ‘expensive’. They charge a retainer and, depending on the client, they take a cut of the payout or the settlement.

But despite the expense Grant can’t thank Red Mist enough, saying: ‘If it wasn’t for Nick I wouldn’t have got through it.’    

lucy.evans@dailymail.co.uk