A spreadbetting firm backed by top banks and hedge funds is in free fall right now after suspending an unspecified number of accounts while it carries out money laundering checks.
Shares in Plus500, which is based in Israel but listed on London’s junior AIM market, are down 30% after the company posted a statement on its website saying client accounts have been frozen.
In a statement Plus500 said:
As an authorised financial institution, Plus500UK Limited has a regulatory obligation to comply with the UK Money Laundering Regulations 2007 and other rules and guidance which requires us — amongst other things — to identify and verify our customers, the nature and purpose of the business relationship and source of funds.
Whilst we understand the inconvenience this will cause, we have no alternative but to place a restriction on your trading account until such time as we have been able to undertake a complete review of the documentation and information we hold currently on you.
Until the review has been satisfactorily carried out, you will be unable to open any new trades on your account, deposit or withdraw funds. If you have any open trades you will, however, still be able to freely service your existing positions with additional Maintenance Margin, although again, will not be able to withdraw funds until the review is complete.
The statement raises questions as to what prompted the review and why customers were not already adequately vetted already. The company has yet to put out a statement to investors on the freeze.
Plus500, which has a sponsorship deal with Athletico Madrid, is backed by a host of top investors including hedge fund Odey Asset Management and JPMorgan, which revealed only today it owns 6.18% of the company.
Business Insider UK has reached out to Plus500 for more information and will update when we hear more.