Spread-betting firm Plus 500 freezes thousands of customer accounts

 

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Shares in the AIM-listed spread betting firm Plus 500 collapsed today after the Israeli company was forced to freeze the accounts of thousands of customers for money laundering checks.

Plus500’s main UK subsidiary, which is regulated by the Financial Conduct Authority and accounts for half of revenues, has suspended accounts while it carries out a “complete review” of its customer details to avoid falling foul of regulations. More than half of its UK customers are unable to trade, deposit or withdraw until they have provided proof of identity and address.

The company had previously been on an aggressive recruitment campaign, boasting more than 100,000 new customers last year and signing up nearly 33,000 new customers in the first three months of the year. But the firm was only carrying out “know your customer” checks when clients were withdrawing funds, rather than at the account opening stage.

Shares tumbled by 36 per cent to close down 272p at 478p the news, wiping £300m from the value of the company based on its £862m market capitalisation on Friday evening.

The collapse also dealt a personal blow to Plus500’s founders Alon Gonen and Gal Haber, who set up the business in 2008 and floated it in 2013. Mr Gonen’s 16.6 per cent stake was slashed by £52m while Mr Haber took a £18m hit on his 5.9 per cent holding.

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