A young professional poker player lost £156,000 at the High Court today when a judge ruled he must pay a rabbi who placed spread bets for him on the Dow Jones index.
Simon Nissim said he would give any winnings from his on-line spread betting to Andrew Feldman, 22, who had lost more than £700,000 at cards.
But Mr Feldman agreed to cover any losses, and ended up with a bill for £136,000.
He had asked deputy High Court judge Richard Snowden QC to set aside a statutory demand for the money served on him by the 34-year-old rabbi.
Today the judge ruled that Mr Feldman, who lives in Bushey, Herts, had not shown any grounds for disputing that he was indebted to Mr Nissim and also awarded the total costs of the case against him.
The judge said that the pair met in 2007 through a Jewish charitable organisation for which Mr Nissim was working.
“They discovered they had a mutual interest in gambling and became friends.”
The judge added: “Mr Feldman’s evidence is that in the first week or so of October 2008 he had lost the astonishingly large sum of between £700,000 and £800,000 playing poker online.”
It was then that the rabbi, who now works in New York, suggested that Mr Feldman might try to recover his losses through online spread betting and offered to use his own account.
The judge said that the pair agreed that Mr Nissim would make spread bets on the Wall Street index on the basis that he would give Mr Feldman any profits made and Mr Feldman would indemnify him against any losses.
“Mr Feldman also accepts that he told Mr Nissim that he was prepared to risk £100,000 to £200,000 in this way.”
Jonathan Lewis, representing Mr Feldman, told the judge at a hearing in May that the two used to be friends and his client “looked up to and placed trust” in the rabbi.
Mr Feldman said in witness statements that when he was first told about the spread-betting losses by Mr Nissim, he believed him, but now he did not.
He said the rabbi was also placing bets on his own behalf and that he had never authorised the “huge volume” of bets.
He said he had agreed to four or five bets a session but Mr Nissim had placed 77 bets in a four-hour period which he had never instructed him to do.
The judge ruled today: “The undisputed facts provide more than sufficient grounds upon which to conclude that Mr Feldman agreed to indemnify Mr Nissim and acknowledged that the amounts claimed by Mr Nissim fell within the scope of the agreed indemnity.”
He added: “Mr Feldman suggests that if the net result had been a positive one (on spread betting), Mr Nissim would have claimed the bets for himself; but that because net losses were made, Mr Nissim ‘had retrospectively sought to allocate to me bets that he in fact made on his own behalf’.”
The judge said this was a “serious allegation” but said it was “inherently unlikely” that Mr Nissim wanted to cheat his friend and had risked his own money on the basis of an unsecured promise by Mr Feldman.
“Risking large amounts of one’s own money up front is not an obvious hallmark of a fraudster.”