U.S Sues To Shutdown Intrade

From Fox Business:

Hours after being sued by U.S. regulators for violating commodities laws, online prediction market Intrade told U.S. residents on Monday to immediately begin shutting down their accounts due to “legal and regulatory pressures.”

The Dublin-based company had recently grown popular with investors as a way to gauge opinions on everything from election outcomes to acts of war.

…Earlier in the day the Commodities Futures Trading Commission filed a civil lawsuit against Intrade The Prediction Market and the Trade Exchange Network with offering commodity option contracts to U.S. customers for trading and soliciting and accepting orders from U.S. customers, violating the agency’s ban on off-exchange options trading.

The CFTC also charged Intrade and TEN with making false statements concerning its options trading website in documents filed with the agency. Both Intrade and TEN jointly operate the online prediction market website.

“It is against the to solicit U.S. persons to buy and sell commodity options, even if they are called ‘prediction’ contracts, unless they are listed for trading and traded on a CFTC-registered exchange or unless legally exempt,” David Meister, director of the CFTC’s division of enforcement, said in a statement.

The CFTC said it is seeking undisclosed civil monetary penalties, the disgorgement of “ill-gotten gains” and permanent injunctions against future violations.

What the CFTC doesn’t mention is that Intrade applied for an exchange license but were denied.

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  • Commander_Chico

    Glad to see their priorities are in order. Allegations of massive manipulation and frauds in the metals markets (selling futures on the same gold to many people), not to mention other shady derivatives, but they sue on this trivial amusement. :(

    Effin clowns. Decline and fall.

  • jim_m

    They should have positioned themselves as an online gambling site.

  • Commander_Chico

    This describes how the CFTC is asleep at the switch of an important thing like actual gold trading:

    http://jessescrossroadscafe.blogspot.com/2012/11/comex-open-saw-24-tonnes-of-paper-gold.html

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