Hedge fund manager's hell: "People in the cell were screaming their heads off"

Neil Phillips is not the sort of person who would usually evince a lot of sympathy. A former Morgan Stanley managing director who founded hedge fund Glen Point Capital in 2015, he admits to being "slightly autistic," and has a reputation as a bit of a hedge fund bruiser. But he has also been through the sort of hell that would not be wished on anyone.

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Since being arrested in Ibiza in 2022 and closing Glen Point, Phillips says he's been ostracized by everyone in the industry, including those he considered friends. 

"No one will talk to me – no one in the market," Phillips tells us from South Africa, where's he's visiting his ageing mother. "These are people I'd spoken to for 20 years and who I'd considered good friends. They suddenly dropped me. All the American banks iced me in two seconds."  

Phillips was arrested for exchange rate manipulation. At the time of his arrest, he was separated from his wife and on holiday in Ibiza as a single father with his children, then aged nine and 13. His ex-wife was ill in South Africa and his son was due back at school, while his daughter was staying with a friend in Ibiza for a few more days. Phillips, who says he had no idea that a warrant was out for his arrest, was suddenly surrounded by armed police at Ibiza airport. 

"I held onto my son while Interpol tried to take me away," he says. "They told me to leave him and to put him on a plane to London on his own. He was hysterical and crying."  

Eventually, the mother of Phillips' daughter's friend came to collect his son. Phillips' sister then arrived to take both children back to London. Phillips, meanwhile, was placed in a holding cell five floors underground, which is where his problems really began.

"I was in a cell with 14 other people in the main jail on a Sunday morning at 8am," Phillips tells us. "They were people smugglers and people coming down from drugs. They were vomiting and defecating and using the toilet in the cell."

Most were young, and 51 year-old Phillips says he stood out like a sore thumb. "There wasn't space to sit down," he says. "It was so squashed you couldn't move. The lights would go on off every four hours and the environment was white and silver and utterly desensitizing. I hid in the corner and felt completely vulnerable. People were screaming their heads off. " 

At this stage, Phillips says he didn't even know what he'd been arrested for.  "The translator couldn't tell me. I was allowed to make one call, but it couldn't be overseas, so I called the mother of my daughter's friend again and asked her to contact my finance director and to tell him that I'd been arrested but didn't know why."

Phillips remained in the holding cell for 36 hours before a brief court hearing, at which it was argued that he was a flight risk. He was then transferred to another jail which he says was like a holiday camp compared to the holding cell, but where he was viciously attacked in a queue to use the phone. "You are allowed to use the phone four times a week for five minutes each time. I queued for three hours to use it, but the guy in front of me phoned a cell phone that went to an answerphone. He was having an argument with the operator about this and when I began speaking to my finance director he thought I was speaking to the operator regarding his call," explains Phillips. "He began hitting me on the head with the metal phone. I had gashes that needed to be stitched. I only escaped because an Algerian guy in the queue behind me flattened him on the basis that in his culture, you respect your elders." 

Phillips was in jail for six weeks before being subject to another 3.5 months of house arrest in Ibiza. He was accused under the US commodities exchange act of making $700 million in trades aimed at manipulating the value of the South African rand against the US dollar, and was initially threatened with up to 40 years imprisonment. 

Phillips has maintained his innocence. He was granted probation in June 2024 after the judge took account of the time Phillips had already been imprisoned and deemed his ultimate counterparty - Morgan Stanley - sufficiently savvy not to constitute an innocent victim. Morgan Stanley has not sought compensation. And Phillips says the bank in fact had its own bid in the system for $2bn US$ at 12.50 African rand (the critical barrier rate he needed to reach for an option to pay out) throughout the weekend he made the contested trades. 

Phillips is currently awaiting the results of another hearing to clear his name entirely. "I traded in line with market rules," he insists. He maintains that the US prosecutors exceeded their jurisdiction: "This was a novel case, and they had nothing on me."

If Phillips is eventually found innocent, he says he will resume his hedge fund career. "I love markets and am one of a few people that can take a lot of risk," he says. "I have had hundreds of job offers and I have a whole life to look forward to."

A verdict that clears his name will enable Phillips to put the past three years behind him. Even before his arrest in Ibiza, Phillips' life had been afflicted by the death of his father, brother and a close colleague, and by mental health issues in his immediate family. "My business was taken away and my whole life turned upside down," says Phillips. "I had done nothing wrong. I want other people in the market to be aware that this can happen to anyone."  

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