Birkenhead MP, Mick Whitley, has called for stronger regulation of trading platforms, warning that the collapse of Football Index is “doomed to repeat itself.”
The Labour Member of Parliament for Birkenhead called for stronger regulation of retail trading platforms in Parliament yesterday, warning that ordinary people are “ploughing massive sums of money” into investments without independent financial advice and that armchair investors enjoyed “little to no protection from financial ruin.”
Retail trading platforms allow non-professionals to invest in stocks, currencies, and cryptocurrencies and have grown exponentially in popularity since the COVID-19 pandemic. Popular platforms including Trading 212 and e-Toro.
But Mick Whitley warned that the “world of online investments resembles the wild west” and accused Ministers of “playing catch-up” and of leaving ordinary people without basic protections while trading.
Speaking to birkenhead.news, Mick Whitley said, “Many of these platforms seem to tantalise users with the promise of financial independence. That’s going to look hugely appealing to young people in my constituency trapped in low-paid work with savings accounts that yield measly interest each year.
“But we’re talking about these are hugely complicated financial products that are being traded and the risk of losing everything you’ve invested is huge. The Government needs to be doing more to protect people’s life savings.”
The Birkenhead MP’s comments came during a debate in Parliament on the collapse of the Football Index last year, which left an estimated 30,000 regular users reeling from losses in excesses of £90 million.
Mick Whitley said that some of his constituents had lost in excess of £100,000. He accused the Gambling Commission of “chronic [. . .] failings” for not having intervened to protect users sooner and said that the continued existence of platforms mimicking Football Index’s business model was a sign that lessons hadn’t been learned.
The MP urged Ministers to “act now” in bringing in far-reaching regulatory reform.