Subtitles section Play video Print subtitles Let June the 23rd go down in our history as our independence day! The British people have made a very clear decision to take a different path. No one really knows what the future is going to look like. That's a defacement of the Union Jack! You're not allowed to deface our flag The shocking defeat of the Remain campaign, "We've got our country back" Caused the largest collapse of any major currency in the history of the modern global financial system. You could literally watch the pound falling off the edge of a cliff. The last time we saw falls of 8%, I'm not sure we actually know. People in the City of London were running their own private polling to get information about the vote while it was still happening. It was probably one of the most lucrative nights for the hedge fund industry that there had ever been. My name's Gavin Finch, I'm a journalist at Bloomberg News. I cover financial crime. I'm Cam Simpson, I'm an investigations editor and writer. My name is Kit Chellel, I'm a reporter with Bloomberg, and a writer for Businessweek. And we're the three reporters who broke the Brexit Big Short. The Brexit night was a huge deal for everyone in the country. I watched it on television the same way most people did. At 10pm voting stopped, the polling stations closed. All of the networks, all of the broadcasters went immediately to their coverage. In or out. It is too late to change your mind now. So within the first minute they had a concession from Nigel Farage who's the global face of Brexit. This statement, as the polls close, "It's been an extraordinary referendum campaign," this is Nigel Farage, "turnout looks to be exceptionally high and looks like Remain will edge it." I remember being shocked when I heard that just because it was quite out of character for somebody like him to concede before even the results had been counted. Later that evening, Nigel Farage came out again with a second concession speech, and this one was a bit more specific than the first. In this one he said that Remain had won, and that he had heard this from some friends in the City who run some pretty big private polling. And that really shook me. That was when I really realized, wait a minute. The pollsters secretly working with hedge funds, and Nigel had access to that information, before any of the votes were even announced. That was the moment when I realized there's a lot here for us to look into. First thing that I did was I created a very detailed timeline of everything that happened politically, everything that the pollsters were doing and how the markets were reacting. We had to try to identify the polling firms that were involved and the hedge funds that they were working for. So we had these two giant haystacks that we kinda had to go searching for needles in. We call this a mosaic investigation. You gather all the pieces that you can and you build a mosaic. It's not a perfect picture, but it's a good picture and one that you can kind of see what happened. So we set out to interview as many of the polling company employees, former employees we started with so as not to alert them to what we were doing. And people were genuinely scared about the implications of talking to a journalist about something like this. We basically wanted to know who the buyers were of these polls and who was conducting them and why. Two polling firms that were notable in all this, and that we highlighted in the story, were YouGov which is one of the fastest-growing polling companies in the world, and a company called Survation. Hello and welcome to Pop Idol. In the early stages of both YouGov and Survation, part of their market legend was built around the work they did on U.K. talent competitions like Pop Idol and X Factor. They were really the first to build polling panels, large groups of people that were available to them online that they could tap with sort of the press of a button. What was interesting about those polls is it was an early indicator that you didn't need to know the outcome of the actual competition. You didn't need to know who won X Factor. All you needed to know was who was gonna vote for which candidate on which particular week in X Factor, for you to then be able to make a market bet. For the Brexit referendum, the senior members of the polling industry told the press that it was not possible to do a regular exit poll for this event. Their normal methods, their normal data gathering simply wouldn't work in this context. What they didn't say was they were secretly doing it for hedge funds at the same time, who were trying to profit on the day from the ultimate inside information which was an exit poll showing how British people had voted. Hedge funds are among the most sophisticated players in financial markets. What they're looking for is an edge, some sort of insight that no one else has that they can use to make their trading profits and make money for their investors. If the markets were deciding this referendum, they would already have called it for Remain. The pound is absolutely surging on the markets. But the pound kept going to new highs all throughout the evening. If you're a hedge fund with access to information showing you that actually, the opposite is likely to happen, then you're in an incredibly good place because you can play that market all the way up to the top. Short selling is essentially a bet in a given direction. The bet is that something will fall in value. So the higher the pound is pushed up, the more money you make when it comes back down the other side. Hedge funds and banks were willing to pay comparatively enormous sums for the data that polling firms were selling because it allowed them to trade so profitably. $100 million, $160 million, $300 million in a single day. When you're looking at the definition of insider trading, insider trading is when you have access to and trade on non-public, market-moving information. In this country, exit polling data is criminally defined as non-public information. It is a crime to provide it to the public or any section of the public before the polls are closed. Polling companies were streaming it all day long to their secret hedge fund clients long before the polls were closed so that they could trade on how people were voting while they were still voting. I hope and pray that my sense of this tonight is wrong. Nigel Farage does seem to think that the referendum is lost. The results as they've been coming through this evening, rather I think cast doubt, very early stage, on Mr. Farage's rather low-key approach to what's going on. So on the evening of the Brexit vote after the markets had closed, the concession speeches which Nigel gave certainly did drive markets higher. What we wanted to understand was why did he concede that night? What information did he have when he made those concessions? What was going through his mind? And whether he had access to some of the private polling that we had identified that was being done by hedge funds? So we really had to figure out a way to try and get to the bottom of some of this and we asked Nigel to come to lunch with us. So we met Nigel Farge at Sweetings. That was on Kit's suggestion and it was a good one because it turns out that Nigel was the third generation of his family who had been eating at Sweetings. It's kind of a strange venue. It feels like stepping back into the 1950s. We went in through the door with him.