Intrade, an online service which allows customers to bet with one another on the events such as weather and election has suspended the trading activity. The company, owned by Trade Exchange Network, announced that it is, currently investigating the possible financial irregularities. The company will not be making any payments to the customers until the investigation procedure is completed. The decision of this investigation has been published in the official website of Intrade. All the open contracts have also been closed at a fair market value as at the day end of 10th March.
Intrade also mentioned that the investigation process will take some weeks and after the same is concluded, necessary course of action will follow. Incidentally, on last month, Intrade’s auditors expressed their concern on irregularities of payments to the account of John Delaney, the late founder of Intrade.
Intrade used to allow customers to bet with one another on possible outcomes of different future events. Similar to stock markets, a so-called prediction market was present in the official website of Intrade as well. The company predicted the results of both the US presidential elections held in 2008 and 2012 successfully and was often used by the Wall Street firms and central banks.
These actions, according to the official statement, have been taken in accordance with the Irish law; however, details of no irregularities were published. The operations manager of Intrade, Carl Wolfenden has declined to air any comment on this decision, so as the spokesperson of the company.
This suspension of trading comes after the collapse of WorldSpreads Group, a spread betting firm from London. In 2012, WorldSpreads Group discovered a shortfall in client funds worth $19 million and that resulted into the shutdown of the company. Incidentally, WorldSpreads used to allow the retail investors to speculate on commodities and stocks without any need to own the underlying asset. This was tax-free as the same was regulated under gambling, not investing.
According to the auditor of Intrade, Caulfield Dunne Accountants & Registered Auditors, the firm didn’t have proper documentation regarding the payments that were made into the bank accounts in the name of the former decreased founder of the company and the other third parties as well. The audit notes were signed off on 4th February. According to audit, current directors, appointed on 13th November, could not comment on document maintenance.