Intrade finds $700,000 shortfall

Intrade, the betting website that halted trading last month amid a probe into suspected financial irregularities, told customers it has found a $700,000 shortfall (€540,000) in client funds as it seeks their backing for a survival plan.

The company uncovered the shortfall after comparing cash on hand and in member accounts with balances on the exchange’s system, Ronald Bernstein, who became a director in November and is leading the rescue effort, said in an e-mail to clients, a copy of which was obtained by Bloomberg News. He confirmed the letter’s contents.

Intrade, which let people bet against one another on the outcomes of events, stopped taking wagers and froze member accounts on Mar 10 after saying it had uncovered suspected financial irregularities.

The company is now asking members to accept immediate repayment of half their frozen money and waive claims to the rest on the “solemn promise” that Intrade will try to refund that later.

Investors have until Apr 9 to sign up to the plan, he wrote.

— Bloomberg