US Authorities Put Intrade in Hot Seat

The U.S. Commodity Futures Trading Commission (CFTC) recently filed a civil complaint against Dublin-based online trading exchange website Intrade in a U.S. Federal District Court, alleging that the companies The Prediction Market Limited (Intrade) and Trade Exchange Network Limited (TEN) "solicited, accepted, and confirmed the execution of orders from U.S. customers which violated the CFTC's ban on off-exchange options trading.” In addition, Intrade and TEN are charged with making false statements in documents filed with the CFTC. In a comment on the civil complaint, Intrade, which provides betting on the outcome of non-sports markets that cover anything from politics to finance, entertainment, transportation, legal, weather, culture or politics, said on its website that it would exit the U.S. market due to legal and regulatory pressures. In relation to this, U.S. residents were urged to close down their Intrade accounts by December 23, 2012. "If this is not done by the deadline noted above, Intrade will close out your predictions for you at what we consider to be fair market value as of the daily session close of December 23, 2012," added the company in the statement. Furthermore, it was stated that Intrade will waive its normal $20 bank wire withdrawal fee to facilitate customer withdrawals on account closures. In the end, the statement reads: "We understand this announcement may come as a surprise and a disappointment, and we apologize for the short notice and haste required to deal with this. We would like to sincerely thank all US customers for their custom, support and loyalty over the years." Intrade derives its revenues from a $4.99 monthly fee, payment transaction fees and a $5 inactivity fee for accounts dormant over 18 months.