Page 37 - Bloomberg Businessweek July 2018

Bloomberg Businessweek July 2, 2018

midnight. Alan Kilkenny, a Rokos spokesman, declined to as he did on Brexit. Andrew Cooper, the founder of Populus
comment for this story. and former director of strategy for David Cameron, also said
Curtice also is president of the British Polling Council, a vol- his firm was paid to create a polling-based model that enabled
untary, self-regulating body that counts YouGov, Survation, a financial client to calibrate trades as results came in after
ICM, and the nation’s other major pollsters among its mem- midnight, but he declined to name that client, citing a non-
bers. The lack of a formal exit poll for broadcasters made it disclosure agreement.
possible for the group’s members to earn record revenue from
Brexit, some polling company executives said. “The claim SHAKESPEARE FOUNDED YOUGOV IN 2000. THANKS TO
sounds plausible,” Curtice said, “but I am not in a position to its prolific use of news media polls to draw commercial busi-
verify it one way or the other.” ness, YouGov developed one of the highest profiles of any U.K.
Another potential obstacle to hedge fund exit polls may polling firm.
have been more significant: It’s a crime in the U.K. to “pub- In YouGov’s early days, a company director tried to get
lish” exit-poll results prior to 10 p.m. Hedge funds wanted attention by using its online surveys to gamble on a televi-
data streamed to them throughout the day so their own sion talent show, Pop Idol. The company later banned employ-
data experts could track trends and so they could make bets ees from betting on its work, but pollsters noticed something:
while people were still voting. The law broadly defines “pub- Their public surveys were moving the odds set by British book-
lish” as making any data “available to the public at large, or makers. YouGov’s staff later realized that people could profit
any section of the public, in whatever form and by whatever off a poll by learning its results in advance, not only by betting
means” [emphasis added]. Gavin Millar, a public law expert on the outcome of the underlying event the poll was meant to
who consulted for a media client about the law in a previous predict, according to sources familiar with the events.
election, said it has never been tested, so conduct potentially As the EU referendum approached, YouGov executives
triggering charges is a legal gray area. (Millar has represented discussed the idea of selling an exit poll exclusively to a sin-
Bloomberg LP in unrelated matters.) On the books since 2000, gle hedge fund for a huge premium—what would become
the crime carries a penalty of up to six months in prison and Operation Pomegranate. The hedge fund exit poll would help
a potentially limitless fine, he said. traders predict the results of the public one YouGov would

40 Inside YouGov, concerns about the law limited the compa- release on TV later that night, according to two knowledge-
ny’s potential offerings, according to an email YouGov founder able sources. The hedge fund could then make trades with
Stephan Shakespeare shared with Bloomberg. YouGov’s chief high confidence, because it could predict how Twyman’s call
financial officer spoke to lawyers and decided that a single would likely move the market, the sources said.
hedge fund could not be considered “a section of the public” Shakespeare confirmed that the two polls showed the
but that multiple hedge funds getting the same exit poll might same thing. But he said it was never his company’s inten-
cross the line. Other polling companies appear to have inter- tion to sell private polls to help clients predict the outcome
preted the law differently. of a public poll. He also said the “trading strategies of hedge
In the runup to the referendum, a handful of press accounts funds are extremely secret. We did not know their strategy
noted that hedge funds were in the market for, or had hired, and still don’t.” YouGov’s hedge fund client “did not know
pollsters, but none provided details. Bloomberg has confirmed what the Sky poll would say,” he added. “They had their own
that the following companies were hired to conduct private independent—more detailed and bigger—data. But the out-
exit polls: YouGov, Survation, ICM, a Birmingham company come was the same.”
called BMG, and ComRes. One reason YouGov could charge so much was that it would
Another company, Populus, conducted an exit poll air the only public exit poll that night in the time slot nor-
for Michael Ashcroft, the former deputy chairman of the mally designated for Curtice’s authoritative survey, the sources
Conservative Party. Ashcroft, who runs a bank in Belize, rou- said. Indeed, YouGov was able to charge much more than
tinely commissions polls that he later releases to the public, what other polling company executives said they collected.

Farage laughed about helping

to push the pound higher ahead

of the crash. “Yeah, and

a good thing—good thing” SOURCE: GETTY