Intrade Sued By CFTC

Discussion in 'Politics' started by JamesL, Nov 26, 2012.

  1. JamesL


    CFTC Charges Ireland-based “Prediction Market” Proprietors Intrade and TEN with Violating the CFTC’s Off-Exchange Options Trading Ban and Filing False Forms with the CFTC

    Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed a civil complaint in federal district court in Washington, DC, charging Intrade The Prediction Market Limited (Intrade) and Trade Exchange Network Limited (TEN), Irish companies based in Dublin, Ireland, with offering commodity option contracts to U.S. customers for trading, as well as soliciting, accepting, and confirming the execution of orders from U.S. customers, all in violation of the CFTC’s ban on off-exchange options trading. The CFTC’s complaint also charges Intrade and TEN with making false statements concerning their options trading website in documents filed with the CFTC, and charges TEN with violating a 2005 CFTC cease and desist order (see CFTC Press Release 5124-05, October 4, 2005).

    Intrade and TEN jointly operate an online “prediction market” trading website, through which customers buy or sell binary options which allow them to predict (“yes” or “no”) whether a specific future event will occur, according to the CFTC’s complaint.

    Specifically, according to the complaint, from September 2007 to June 25, 2012, Intrade and TEN operated an online “prediction market” trading website, which allowed U.S. customers to trade options products prohibited by the CFTC’s ban on off-exchange options trading. Through the website, Intrade and TEN allegedly unlawfully solicited and permitted U.S. customers to buy and sell options predicting whether specific future events would occur, including whether certain U.S. economic numbers or the prices of gold and currencies would reach a certain level by a certain future date, and whether specific acts of war would occur by a certain future date.

    The CFTC’s complaint also charges Intrade and TEN with knowingly filing false “Annual Certification” forms with the CFTC stating that Intrade limited its options offerings to eligible market participants. Contrary to these representations, the complaint alleges that Intrade unlawfully solicited and permitted retail U.S. customers to buy and sell off-exchange options on the website.

    In addition, the complaint alleges that TEN violated an order issued by the CFTC in 2005 that found that TEN had previously engaged in similar conduct and ordered TEN to cease and desist from violating the Commodity Exchange Act and CFTC regulations, as charged.

    David Meister, the Director of the CFTC’s Division of Enforcement, stated: “It is against the law 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. The requirement for on-exchange trading is important for a number of reasons, including that it enables the CFTC to police market activity and protect market integrity. Today’s action should make it clear that we will intervene in the ‘prediction’ markets, wherever they may be based, when their U.S. activities violate the Commodity Exchange Act or the CFTC’s regulations.”

    In its continuing litigation the CFTC seeks civil monetary penalties, disgorgement of ill-gotten gains, and permanent injunctions against further violations of federal commodities law, as charged, among other relief.

    The CFTC acknowledges the Central Bank of Ireland for its assistance in the CFTC’s investigation of Intrade and TEN.
  2. pspr


    I was wondering when something like this would happen.

  3. You're just mad their predictions are 100 times better then yours

  4. 377OHMS


    So they're going to treat Intrade like online gambling?
  5. Tsing Tao

    Tsing Tao

    Isn't it?
  6. 377OHMS


    Doesn't that mean that people will not be able to use Intrade from the United States?
  7. Arnie


    Nice to the CFTC doing their job, you know, protecting small investors from Co.'s like MF Global.

    Fucking idiots
  8. jem


    now you know why smart people didn't bet in Intrade. The govt could charge you with a crime. If those markets were predicting anything it was that people were stupid enough to make small bets and leave themselves open for prosecution. The smart money did not go there.

    wait until they get all the records of US customers making bets and or not reporting the profits on their taxes.
  9. What is the crime?
  10. jem


    I changed it before I saw your post... it leaves you open for prosecution.
    I am not sure that it is a crime. But when you live in a country where the leaders do not care about the constitution... you can be charged with anything for leverage.

    sooner or later... I hope the majority of the country starts to care about constitutional rights... again.
    #10     Nov 26, 2012