Commodities regulator sues Intrade over trading in U.S.

WASHINGTON Mon Nov 26, 2012 12:39pm EST

WASHINGTON (Reuters) - The Commodity Futures Trading Commission on Monday sued the owner of the prediction market and betting website Intrade, alleging that the company allowed unauthorized trading by U.S. customers.

The civil suit, filed in U.S. District Court in Washington, D.C., said Intrade offered trading to U.S. customers on the future prices of commodities such as gold and crude oil despite a 2005 agreement not to offer trades on those and other items.

Intrade, based in Dublin, Ireland, did not immediately respond to a request for comment.

The electronic exchange offers a wide array of subjects to bet on, such as which film will win the Academy Award for Best Picture or whether Syria President Bashar al-Assad will remain in power into 2013.

Intrade is not supposed to accept or execute orders from U.S. customers on subjects that fall within the CFTC's ban on trading options off-exchange, but it did so from September 2007 through June 2012, the suit said.

The suit further alleged that the company misled the CFTC by submitting a form each year certifying that it limited trades to eligible participants when it did not.

The commission notified Intrade's parent company, Trade Exchange Network Ltd, of alleged violations of their 2005 agreement in March, but the company "has failed to cure, or attempt to cure, its violations," the suit said.

The suit asks a federal judge to find Intrade in violation of federal commodities law, issue an injunction against any illegal conduct and fine the company.

(Reporting by David Ingram; Editing by Gerald E. McCormick and Kenneth Barry)

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Comments (1)
4Sanity wrote:
This is outrageous on so many levels. CFTC completely dropped the ball leading up to the 2008 financial debacle, and STILL haven’t prosecuted any of those involved in the various derivatives scandals. But now they are flexing their tiny little muscle by trying to shut down a small Irish prediction market that the entire US media has relied on for forecasting electoral and other events?

Intrade BEGGED the CFTC to give it regulatory status for years, and it made no public comment. Now their first public action is to RETROACTIVELY claim that Intrade violated rules that the CFTC had not even had the decency to make public?

Nov 26, 2012 6:03pm EST  --  Report as abuse
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