Latest posts of: Jim R

Quote from: Doobs on August 28, 2012, 01:41:49 AM

BUMP

This is the transcript of the Feldman/Zimbler case. I won't add anything other than to say it isn't Feldman that looks bad here.
not much more to add lol
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JUDGE MACKIE: Now that closing submissions have concluded, I am going to give judgment on the spot in the slightly inconvenient circumstances of 30th November with industrial action and the effect that that has had upon the organisation of the court. For that reason I reserve the right to correct any transcript to ensure that it records, as it were, not only what I say but also what I mean to say.

J U D G M E N T

JUDGE MACKIE:

1. In this case the claimant, Mr Feldman (a professional poker player) gave £50,000 to the first defendant, Mr Zimbler, as part of an arrangement, the terms of which are in dispute. With the involvement of the second defendant, the first defendant lost all £50,000 in a few days of spread betting. The claimant wants his money back, or at least part of it, bringing claims principally in contract and under the Financial Services and Markets Act. The first defendant denies that the effect of the arrangement obliged him to pay anything back. The claim against the second defendant, a Mr Glassman, is based on a liability under FSMA. Mr Glassman denies that his role was one which could come within the provisions of the Act.

2. This action was begun in the Willesden County Court and is for what, in terms of this court, is a small amount of money. It was transferred here from the County Court, I understand, because of a concern that it might involve technical matters of spread betting. The claimant has been represented by Mr Oliver and the two defendants by Mr Holmes-Milner. One feature of this case has been the considerable ability with which both counsel have cross-examined the witnesses and have dealt ably, but succinctly, with the relevant legal issues.

3. The court has two bundles of documents. I heard live evidence from the three parties and from Mr Quereshi, a friend of both defendants, who received a cheque from Mr Zimbler in circumstances to which I will refer.

4. As in so many cases, many of the central facts are either agreed or not much in dispute. Mr Feldman was just 21 in the autumn and winter of 2008 when the events in issue took place. Mr Zimbler is a man in his early thirties. Both are professional poker players, although I think Mr Zimbler would concede that Mr Feldman is, further up the ability pecking order than Mr Zimbler. Mr Glassman, the second defendant, is a close friend of the first defendant, Mr Zimbler, having known him since he was at school. Mr Glassman is about 40 and has a wide experience of business life, having run many businesses, and these are listed in his witness statement. Much of the working and investment life of the defendants, and to some extent the claimant, has been conducted informally and arises out of, and to some extent depends upon, friendships between themselves. This is a world where debts are incurred and paid in and around casinos, without a paper trail being created. Transactions take place which are informal, imprecise and not put into writing. There is nothing wrong with that, but informality creates difficulties when there is resort to law. Inevitably, in business matters that are at all complex, and with events that occurred some three years ago, the documents are very important; not only do they jog memories but they also enable the court to seek to resolve differing recollections.

5. Mr Feldman left school on his eighteenth birthday and since then he has been a very successful poker player in clubs, online and at competitions, often in far away places like Las Vegas. Mr Feldman when giving evidence seemed to me an intelligent and articulate man, but one whose exposure to a wider business world and to a broader community than professional poker playing has been very limited. In 2007, Mr Feldman and Mr Zimbler met in a poker context and became friendly. Mr Feldman saw the friendship as being a closer one than did Mr Zimbler. Mr Feldman was short of opportunities to make friends in his pressured environment, Mr Zimbler, an older person with a much more varied working background, less so. The two kept in touch, often through social messaging media. Mr Feldman's success, as I say, was considerable. It seems that by the middle of 2008 he had accumulated some £4 million. Mr Feldman had become involved in spread betting, despite his youth, as a result of developing a friendship with a much older man (a rabbi) in the context of community activities. Spread betting was engaged in and the man concerned, Mr Nissim, and Mr Feldman fell out. There was a dispute. Mr Nissim served a bankruptcy notice and Mr Feldman failed to have it set aside, both at first instance and on appeal. One might at that point have thought that Mr Feldman had had enough of spread betting, but it was not to be.

6. The case involving Mr Nissim incurred Mr Feldman in losses of the order of £140,000, plus, presumably, legal costs, and in other ways 2008 was not proving to be a good year; it seems that he lost some £700,000/£800,000 playing online poker. By the autumn of 2008 he was in some difficulties and he was consulting Mr Zimbler, when they were in contact about how he was to deal with the problems facing him. However, things had not been going well for Mr Zimbler, either.

7. Mr Zimbler left school when he was 16 and got involved in various forms of selling and, in particular, estate agency, and moved to Spain. He also developed expertise in poker playing and started travelling the world making money doing that. However, as I say, things did not go well in 2008. He puts it as follows:

"In 2008, I took my annual trip to Vegas for the WSAP [that is a world poker tournament]. For me, it ended in disaster; I incurred heavy losses playing roulette and blackjack. I came back to the UK without any money. I worked for my friends, Mark Glassman [the second defendant] and Taj Rata, in their sushi business for a few weeks until I got on my feet. They leant me a car to drive around in."

8. Mr Zimbler also, in and around September 2008, started doing, spread betting himself on a small scale. In the course of his evidence, he appeared to back off to some extent from the suggestion that he was in serious financial difficulties by remembering that he had £15,000 or £20,000 in cash. I was not much convinced by that, coming, as it did, quite late in his cross-examination. It is clear, both from his cross-examination and also from the understandable concern shown by his friends, Mr Glassman and, to some extent, Mr Feldman, that he was, indeed, in serious financial difficulties at that point. It was around about that time that a meeting took place, about which there are somewhat different accounts.

9. Mr Feldman says that the first time he became involved in talking about spread betting with Mr Zimbler was outside the Borehamwood poker club in October 2008. He says that he was then invited to meet Mr Zimbler's friend, Mark Glassman, whom he claimed was experienced in spread betting and who could make big money. Mr Feldman says that:

"Paul stressed that it would be best to meet Mr Glassman quickly as the markets were volatile and a lot of money could be made through the markets because of the impending American Presidential elections."

10. He said that he was taken to meet Mr Glassman at a restaurant in East Finchley in November and that Mr Glassman advised that a good sum to invest would be £50,000 to £100,000. He said that he was then later taken to Mr Glassman's offices which were nearby and there he met a colleague of Mr Glassman's and was given a demonstration how spread betting worked.

11. Mr Zimbler put it slightly differently. He said that, he and Mr Feldman have kept in touch. In October 2008 Mr Feldman approached him for help. He did so as a friend. "He wanted to recoup his recent losses and asked me to do some spread betting on a joint venture basis. He told me he was looking to double his stake. He knew that I had a friend, Mr Glassman, who was more experienced than me in the field who he wanted to involve." He said that he set up a meeting with the three of them and they met, first, at Mr Glassman's office. He said that Mr Glassman did not invite Mr Feldman back. He said that Mr Glassman made it clear to Mr Feldman at the meeting that he would not place any trades without being in funds.

12. Mr Glassman said that he agreed to join Mr Feldman and Mr Zimbler to discuss a proposed spread betting venture between the other two parties. They met at lunch, and:

"Over lunch and after initial small talk, the others were keen to discuss their spread betting venture. We discussed the types of spread bets I placed and possible profits and losses. I recall he said he wanted to double his money. I explained to him that spread betting was very risky, particularly if the intention was to seek large returns quickly because this would require taking greater risks. I emphasized the risks and told him that I had recently lost a lot of money spread betting and that my IG Index account was over £30,000 overdrawn as a consequence."

13. It is unsurprising that witnesses (even wholly candid and honest witnesses) should have differences of recollection about what happened.

14. Events after that are, in some respects, clearer because they are recorded (to some extent) in contemporaneous emails. The first of those was an email from Mr Zimbler to the claimant on 16th November and, as it is significant, I will read it out:

"Andrew, hope you're having fun in Miami and that your other evening went well. Re investing. We have spoken about the Dow, and now also no interest in the currency. The USD is getting stronger by the day, by some 250 points average over the last two weeks against the GBP and also the Euro. This is an interesting market to make some money in over the next few weeks, even months. The Dow also. It was down to 8200 and went up to 9200 like we predicted and then, as we also thought, would drop back to around 8000 before climbing again. It's around 8350 when I looked on Friday, so now is a perfect time to get into that. Finances. All I can tell you is that if I had money I'd be investing what I could. Saying that, I know you've had a bad experience with investing already, and still not sure how you lost money at that time if your friend, like you said, has been doing this for a while, anyway. I'm going to put in some money myself to share the risk as I want to make money. On your side, I would suggest whatever makes you comfortable."

15. It seems common ground that Mr Zimbler did not, in fact, have money himself to share that risk.

"100K would be an ideal amount. 50K would be OK, too, as, if it was 100, would prob not even use more than 50, unless all was really bad, and at that point you could also choose to stop, as I will give you daily updates. I think you know me well enough that I am not a scam artist or looking to rob you. I want to make some money and, with a bank roll, like, if anything, not only do you have a better chance, you can also make a lot more. I will be starting small, at like a hundred a point. No need to go higher. If it moves in right direction, you can buy more and also to limit the risk element. Saying that, I'm happy to share profits, however you see fit. I do not think it's something I can just tell you; you're input is also needed. I would suggest, like we spoke about before, that once we make X amount, like double our stakes, we take out our original stakes so there is no risk and keep taking money out as we are making it. This could be weekly. Then we can share the profits out and use the profits to trade with ..."

with multiple exclamation marks.

"I'm happy to do the work and, with help from friends who also do this and know things, make some serious money. If you want to split the profit 50/50, that is fine with me. Let me know your thoughts. Remember, this is not just on your investment; I, too, am going to put some money in, 15 to 25K. If you want to just use your money, you could and should have a bigger share, but I'm happy to take risk also."