Intrade faces liquidation

  @emilyjanefox April 7, 2013: 12:57 PM ET
NEW YORK (CNNMoney)

After shutting down last month, the online betting site Intrade is facing liquidation due to a $700,000 cash shortfall.

"If the company is not able to rectify this cash shortfall position very quickly, (it) will become insolvent and therefore is very likely to go into liquidation," said Intrade director Ronald Bernstein, in a note to customers Friday.

Bernstein asked members with account balances over $1000 for "forbearance," to allow the company to remain solvent.

Intrade is a website where users bet on outcomes on a wide variety of events. It has been widely followed for its predictions of the U.S. presidential elections. The company is based in Ireland.

Last month, a notice on the Intrade home page said it had halted trading on its site "due to circumstances recently discovered" that required further investigation. The action follows a series of events that started late last year.

The U.S. Commodity Futures Trading Commission filed a complaint against the company in November charging Intrade with violating U.S. laws on options trading and making false statements in official filings.

The company advised U.S. customers to close out open predictions as soon as possible and withdraw all funds from their accounts by Dec. 31.

How Bitcoin works

On Friday, Bernstein said that the company intends to "pursue two substantial monetary claims against two distinct parties for an aggregate amount greater than $3,500,000."

He didn't provide details, but said the legal claims could ultimately allow the company to provide full restitution to its members and also resume commercial operations.

Bernstein said he will inform Intrade's members by April 16 if enough members agreed to a forbearance.

He said the company will try its best to return 100% of members' account balances, but "can make no promise or assurance that we will be able to do so." To top of page



Join the Conversation
Markets
Sponsored by
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 1:55pm ET
Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Overnight Avg Rate Latest Change Last Week
30 yr fixed4.36%4.24%
15 yr fixed3.39%3.26%
5/1 ARM3.36%3.27%
30 yr refi4.34%4.22%
15 yr refi3.38%3.24%
View rates in your area
 
Find personalized rates:
Rate data provided
by Bankrate.com
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.