UK government appoints Malcolm Sheehan QC to lead review of Football Index collapse

The UK government’s Department of Culture, Media and Sport (DCMS) has confirmed that Malcolm Sheehan QC will lead its independent review into the collapse of the football stock market Football Index.

This comes after Football Index went into administration in March 2021 and had its licence suspended by the Gambling Commission.

DCMS appoints Malcolm Sheehan QC to lead review

After BetIndex, Football Index’s parent company, went into administration the government announced an independent inquiry into the collapse would be conducted.

The inquiry aims to determine how the collapse occurred and if more could have been done to prevent it. The decisions made by the Gambling Commission regarding the collapse will also be assessed.

In the DCMS announcement, it was revealed that Malcolm Sheehan QC, a barrister for Henderson Chambers will lead the review into the collapse of BetIndex

Sheehan specialises in product liability and group actions, commercial and insurance disputes, commercial property, personal injury, health & safety, public and regulatory law.

In its statement, the DCMS said: “The review will examine the actions of the Commission in assessing, licensing and monitoring the operator. In addition, the review will examine the actions taken by the Financial Conduct Authority in determining whether the product should be regulated under the Financial Services and Markets Act.”

The barrister’s review will cover the period between September 2015, which is when BetIndex was awarded a licence by the Gambling Commission, and March 2021, when the licence was revoked.

The DCMS stated that the review would be independent of BetIndex’s ongoing administrative proceedings. Sheehan is expected to complete his report on the findings of the review this summer.

The inquiry will also be independent of the Gambling Commission’s review of the firm’s collapse.

“Alongside any lessons learned for the regulators, the report will feed into the government’s ongoing Gambling Act Review.The government intends to publish a white paper following the call for evidence on the Gambling Act Review before the end of the year,” the DCMS added.

What happened to Football Index?

On 12 March the football player trading platform Football Index announced it was entering administration following a mass player exodus the same week.  

The exodus was sparked by a new policy that involved an 80% reduction in dividends paid for each player transaction made on the platform. This led to a major drop in asset value (player price) which in turn lowered the returns for customers. 

Some users reportedly lost tens and in some cases hundreds of thousands of pounds. One bettor claimed to have lost £250,000 due to the company’s decision.

Football Index said it would restructure and relaunch its platform, but the Gambling Commission went on to suspend its parent company’s licence.

In May, the company provided an update to investors addressing the distribution of lost finances to customers after it was forced to enter administration.

Football Index customers are still awaiting a court ruling on the status of the funds they hand in their accounts or in active bets when the firm went bust.

The case to determine the distribution of funds in a player protection account was sent to the High Court where it is still taking place. The funds in the player protection account is only intended for account funds, but the court must decide on a cut-off date which winnings should be paid up to.

Ahead of the hearing, documents were released that revealed the company planned to go into administration just days before making changes to its dividend system.