Nigel Farage has denied placing currency bets against sterling after an investigation raised questions over public statements he made suggesting the remain camp had won on the night of the EU referendum.
A spokesperson said on Monday that Farage “had no financial interest in currency movements on the night of Brexit”, after a Bloomberg report alleged that currency speculators used inaccurate early predictions of a remain victory to profit by shorting the pound.
Farage twice said he thought the remain campaign had won the referendum but, according to Bloomberg, was privy to private exit poll data indicating the public had voted in favour of leaving the EU.
At 10pm on the day of the referendum, Farage gave an interview to Sky News in which he said: “it looks like remain will edge it. Ukip and I are going nowhere and the party will only continue to grow stronger in the future.”
Just over an hour later, Farage gave a second interview to the Press Association, in which he said: “I don’t know, but I think remain will edge it, yes … If I am wrong, I would be thrilled. But it is what we have seen out and about, and what I know from some of my friends in the financial markets who have done some big polling.”
Bloomberg noted that books, by the leave campaign financier Arron Banks and the political journalist Tim Shipman, both said Farage learned the results of “an unidentified, financial services exit poll” before polls closed at 10pm.
Farage told Bloomberg that the only external exit poll he received on the day of the referendum was conducted by Survation. Survation’s poll correctly predicted that leave would win the referendum. He repeatedly told Bloomberg that he learned the results of the exit poll “minutes after” Sky broadcast his comments.
The news of an apparent concession by the leave campaign’s most prominent figure immediately after polls closed pushed the value of sterling higher.
However, when the pound subsequently crashed as the true result became clear, any individuals or companies with short bets would have profited. Shorting is the practice of selling shares or other assets which you don’t own, in the hope of buying them back at a cheaper price in the future and making a profit.
In October 2016, the Times published an article concerning bets against sterling placed by pro-Brexit campaigners. When asked if he had “conceded” the referendum in a deliberate effort to drive up the value of sterling, either for the benefit of hedge funds or himself, Farage replied: “No, no, no, no. I wasn’t shorting it – I should have done!”
A spokesperson for Farage said: “There were many conflicting opinions and supposed polls on the evening. On balance, Nigel was negative until the Sunderland result came in.”
“Nigel Farage took no position, and had no financial interest in currency movements on the night of Brexit.”
The Bloomberg report has raised difficult questions for the polling industry, which has been depicted as benefiting extensively from the sale of private polling data to hedge funds seeking to profit from insights into how markets might move.
Sources told Bloomberg that they believed Brexit to have generated “one of the most profitable single days in the history of their industry.” Odey Asset Management, run by the Conservative party donor and leave supporter Crispin Odey, is reported to have made $300m from Brexit.
It is illegal under British electoral law to “publish” exit polls before 10pm on the day of an election or referendum. Hedge funds and pollsters appear to have interpreted the law so as to permit the private provision of exit poll data to select individuals. A prominent barrister told Bloomberg that the legal definition of “publish” had never been tested.