Intrade Halts Service on Possible Financial Irregularities Probe

Monday, 11 Mar 2013 08:00 AM

 

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Intrade, an online service that lets people bet on events including elections and the weather, ceased trading activity, saying it is investigating possible financial irregularities.

The service provider has settled open positions, and stopped banking transactions for company accounts, Intrade said in a statement on its website. It didn’t give details of any irregularities and said it took the actions in accordance with Irish law. The company’s parent, Trade Exchange Network Ltd. is based in Dublin.

In November, Intrade asked U.S. clients to close their accounts after the Commodity Futures Trading Commission sued the website for allegedly offering improper options trading. Trade Exchange in 2005 agreed to pay $150,000 to settle allegations it illegally offered contracts in the U.S., including some based on the price of gold, crude oil, the euro and the yen.

“To mitigate any further risk to members’ accounts, we have closed and settled all open contracts at fair market value as of the close of business on March 10, 2013,” Intrade said in the statement. “It is not possible to make any payments to members in accordance with their settled account balance until the investigations have concluded.”

The market’s most active trades before bidding ceased were over the Papal succession and whether the Democratic Party would win the 2016 U.S. presidential election.

There were 32,576 open positions at 8:07 p.m. Dublin time on March 10, according to statistics published on its site. Intrade held members’ funds of $5.7 million at Dec. 31, 2011, and had net assets of $1.9 million, according to accounts filed with Ireland’s corporate regulator.

Intrade Founder John Delaney died in May 2011 at the age of 42, less than 50 yards (46 meters) from the summit of Mount Everest, the New York Times reported at the time.

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