Nigel Farage has become one of Britain’s most successful politicians, yet an examination by the Financial Times of his earlier years reveals that the man who has traded on his pinstriped City gent image had a relatively modest career in the Square Mile. One of his metals broking companies ended up insolvent.
“This suggestion that he was a very wealthy man in the City is probably a bit of a misnomer,” one metals broker says. “I don’t think he was anywhere near as successful as some people are portraying. He probably does better out of being an MEP.”
Mr Farage has City culture in his blood: his father Guy Justus Oscar Farage was a well-known, hard-drinking stockbroker and his brother Andrew became a broker on the London Metal Exchange.
The young Nigel chose to skip university and follow his father into the City after finishing his studies at Dulwich College, a private school in southeast London. In 1982, he joined Maclaine Watson, a traditional English commodities brokerage.
Margaret Thatcher’s Big Bang deregulation transformed the City almost as soon as Mr Farage started. The smoky offices of Maclaine Watson were taken over by Wall Street brokerage Drexel Burnham Lambert just before Mr Farage entered. He later moved to another English broker, R J Rouse & Co, which was acquired by the French bank Crédit Lyonnais, again ending its independence. He was asked to leave Crédit Lyonnais Rouse after taking a drunken friend on to the floor of the LME following a long lunch. He then started his own business, Farage Futures, in 1994. The small operation helped broker orders on the exchange for clients. He gave one share to his mother Barbara Stevens who was listed as secretary, records show.
“He was a natural-born salesman,” recalls Alex Heath, a fellow broker. “Setting up on your own requires backing and it requires people who believe in you and Nigel is very good at getting people to believe in him.”
Companies House records show that in 1995, the year after it was founded, Mr Farage made profits of £106,000. During its eight-year life, Farage Futures made total net profits of £874,000 and Mr Farage held 99 per cent of the shares.
“He had a successful brokerage. Was he one of the other ones where everyone starts asking: ‘Hmmm, so you’ve got your own helicopter?’ No, he wasn’t one of those,” says another person who worked with the company.
At Farage Futures’ offices, cigarette smoke hung 4ft from the floor as staff worked in their shirtsleeves, using two telephones at a time, according to one metals veteran.
Brokers remember a gentlemanly atmosphere on the LME during the 1980s and 1990s. But those who made more money traded on the Liffe derivatives market.
“People were reasonably well paid, but my guess is that there were people in the Liffe market who were throwing much more money around than the LME,” says a broker who worked with Farage in the 1980s.
In dark wood-panelled pubs, such as the Jamaica Wine House and Simpson’s Tavern, in narrow stone streets near the City’s Leadenhall Market, Mr Farage spent his career drinking with the tight-knit fraternity that traded on the LME. Many of them were sympathetic with his views opposing the EU.
It was during this period that Mr Farage met his now wife Kirsten Mehr, a government bond trader, while on a trip to Frankfurt; they married in 1999.
The sense of nostalgia for a lost age was summed up by Farage senior. While in a lift with Sir Nicholas Goodison, the chairman of the London Stock Exchange at the time of the Big Bang, he is reported to have lamented: “You’ve ruined the best gentleman’s club in the world.” The 127-year-old LME ended up being sold to Hong Kong Exchanges and Clearing in 2012, a sale Mr Farage opposed publicly.
Among LME brokers, many remember how Mr Farage’s involvement in a “Save the Pound” campaign in the early 1990s was supported by many on the metals exchange, who helped him raise money and wore pins on their lapels.
“If you want to find sympathy for his views all you have to do is stand in the middle of the City of London and say: ‘Who thinks Brussels is a complete waste of time money and effort?’ and you’ll get lots very quickly,” one metals trading veteran who worked with Mr Farage says. “You’re preaching to the converted.”
Another blow to the old City world came in a series of rogue trading scandals that Mr Farage managed to avoid. In the late 1990s, Japan’s Sumitomo Corporation revealed losses of $1.8bn because of a rogue copper trader, Yasuo Hamanaka, who was well known on the LME. He had traded with Crédit Lyonnais Rouse at the time Mr Farage was there.
“I think he was more angry at that time about the fraud and everything that surrounded it because it gave the markets a bad name. He’s always been a very City-oriented chap,” says Steven Spencer, an industry veteran.
Mr Farage’s next broking venture was less successful. In 2003 he joined forces with his brother and another metals broker, Daniel Gillespie, to found Farage Limited, a commodities broker. That company ended up insolvent. In September 2014 it was in the process of paying back £33,000 in owed taxes. Mr Farage remained a director until February 2011, records filed at Companies House show.
But if Mr Farage’s City career was modest, his subsequent political success cannot be disputed. Under his leadership, the UK Independence party has gone from mocked fringe group to a serious poll contender that won more votes and seats in the European Parliament elections last year than any other British party.
“Nigel’s personality is what makes him stand out from the rest of the world. He’s a very quick thinker . . . his ability to see what people want to know,” says another metals broker. “I think it sets him apart as a politician. That’s why he has been as successful as he has.”
Neither Mr Farage nor Ukip would comment on his City career for this article.