IG Group

The company was founded in 1974 by Stuart Wheeler as a spread betting business under the name IG Index (an abbreviation for Investors Gold Index) which allowed people to trade gold prices as an index instead of buying the physical commodity. In July 2000, shares in the newly named IG Group plc were first listed on the London Stock Exchange.[12]

In July 2002, IG Group commenced trading in Australia after a change in the country's financial services legislation made it possible to offer contracts for difference to Australian residents.[13] IG Group took the opportunity to acquire its founder's shares, and those of certain other long-standing shareholders, in a management buy-out (backed by private equity firm CVC Capital Partners) which valued the company at £143 million; IG Group plc's listing on the London Stock Exchange was subsequently cancelled on 7 November 2003.[14]

In May 2005, after two years of private ownership, IG Group and CVC Capital Partners re-floated the company on the main list of the London Stock Exchange with a valuation of £393 million.[14] In October 2008, IG Group acquired FXOnline Japan KK, a Japanese retail FX business.[15]

In 2007, it purchased HedgeStreet, a small US based company that developed an electronic marketplace that allows online retail investors to trade financial derivatives. It renamed this the North American Derivatives Exchange or (NADEX) and has been attempting to use this to develop a product that looks like its binary option "digital 100s" product but that meets the US financial regulations and can be offered to retail traders. In 2007, IG has also been labeled as a gambling company by some of authoritative media. The Telegraph's warning report stated that although such spread-betting companies as IG have been regulated by the UK financial regulator, "no amount of regulation will help you if you get your bets wrong, so in that respect there is no doubt it is risky, and you should make sure you know what you are doing before you get involved".[16] In May 2010, it obtained permission from the US Commodity Futures Trading Commission to make various technical changes that move in that direction.[17] Later in 2010, IG Index, IG Group's spread betting firm, was hit with a claim for €25 million by three former clients of defunct Scottish trading firm Echelon Wealth Management for unspecified losses.[18]

In June 2011, IG Markets shut down its traditional fixed-odds sports service extrabet, which had an emphasis on in-play betting. The fixed odds sport service was shut down to focus on financial wagers, after failing to find a buyer for the whole unit.[19] In September 2014, the company started its own online stockbroking platform offering some 4,500 stocks.[20]

In January 2015, the Swiss National Bank announced that it would be discontinuing its minimum exchange rate policy. IG customers incurred losses of £18.4 million after it happened. They accused the company of breaching UK regulations by acting out of self-interest and alleged a failure by company to provide the best execution to everyone.[21][22] In October 2015, after claims by many of the firm's clients,[23] IG "accepted a ruling by the UK’s Financial Ombudsman Service that it should compensate customers for money lost during a rapid appreciation of the Swiss franc in January".[24]

In September 2016, IG Group acquired DailyFX, a foreign exchange trading news and research portal, from FXCM for $40 million.[25] Later, in December, Peter Hetheringon, the CEO of the company, criticised the Financial Conduct Authority in the UK after it announced new measures to overhaul the industry, publicly blaming the regulator for weakness in some aspects of implementation and its lack of understanding of what the proposed changes could bring.[26]

In December 2016, the FCA questioned whether binary bets "serve a genuine investment need" and defined them as more akin to gambling. Aside from most consumers losing money, the FCA's other concerns included the addictive nature of binary options betting, and inherent conflicts of interest. "Since 2012 there have been a reported 2,605 victims who lost a total of £59.4m on binary options scams – an average of nearly £23,000 each".[27] In 2017, investors lost more than £87,000 a day on binary option scams alone.[27]

In January 2017, IG group announced their decision on withdrawal of the binary options betting product, admitting that the arrival of the regulator to the market would significantly worsen the company's state of affairs. The director of IG corporate affairs stated: "I think that product will come under regulatory pressure in the future. That does not influence our view – it's simply a fact." At the same time, analysts stated that the IG's binary option withdrawal has been more akin to provocation: "It was a pre-emptive measure to mitigate further regulation".[28]

In April 2017, IG Group launched IG Smart Portfolios – a suite of ETF investment portfolios created in partnership with BlackRock, marking the company's first move into online wealth management.[29] In October 2018, IG Group appointed June Felix as CEO[30] and, in February 2019, IG Group launched IG US to enter US market.[31]

Following his tenure as Chief Financial Officer, Tim Hawkins was appointed CEO in October 2006, retiring 9 years later in 2015.[32] Following the departure of Tim Howkins, Peter Hetherington became CEO in October 2015, having started at the company as a graduate trainee in January 1994. He later stepped down in September 2018.[33]

In October 2018, IG Group appointed June Felix as CEO.[34] Felix served as a non-executive director for three years before joining the board.[35] As of October 2020, Felix also serves on the board at Relx PLC.[36]

IG acquired tastytrade in June 2021 for $1bn, a trading platform catering to individual investors. Privately owned tastytrade was co-founded in 2011 by Tom Sosnoff who also founded thinkorswim, a brokerage firm that was acquired by TD Ameritrade for $606million in 2009, and Dough, Inc.[37] Subsidiary tastyworks was launched in January 2017 as a brokerage arm of tastytrade.[38]

In December 2021, IG brokered a deal for the sale of North American Derivatives Exchange (Nadex) and a 39% stake in Small Exchange Inc to Foris DAX Markets Inc, which trades as Crypto.com, completing the $216 million sale in March 2022.[39] Nadex is a U.S. derivatives exchange regulated by the Commodity Futures Trading Commission encompassing short term binary options.[40]

In 2021, FinanceFeeds and Financial Magnates reported that IG Group's system, supposedly accustomed to low volatility periods, faced frequent outages at the time of higher-than-usual trade volumes.[47][48] Such crashes left clients unable to control the positions, leading to loss of funds. FinanceFeeds also mentioned that during the January 2021 outage, IG Group provided no customer support (up to not answering the phone calls) but immediately reacted to request for commentary to protect its public image and deny the issues raised by the clients.[49]

In February 2021, IG Group and 34 other brokers and hedge funds were targeted by an antitrust class action lawsuit for allegedly conspiring against non-professional investors when GameStop short squeeze took place. According to the plaintiff, the defendants hatched an uncompetitive scheme to limit the trading of certain securities after the failure of their highly speculative short-selling strategies, thus violating state antitrust laws.[50]