The trading for the shares of Plus500 Ltd (LON:PLUS) resumed after it was halted earlier today. Its stock price closed 248.00 pence per share, down by more than 35% in London. The company lost more than two-thirds of stock value this week.
The London Stock Exchange (LSE) lifted the suspension of the trading for Plus500 shares around 13:15 (local time) after issuing a statement in response to the speculations surroundings its ongoing dialogue with the Financial Conduct Authority (FCA) of the United Kingdom.
FCA ordered review into Plus500 anti-money laundering controls
Plus500 Ltd disclosed that the FCA ordered a freeze on customer trading accounts without the proper AML documentation. The FCA decision was part of the review into its anti-money laundering, financial sanction systems, and other related regulatory controls, which started on January 15.
The FCA required the company to appoint a skilled person to conduct the review, which was completed on May 15, 2015. Plus 500 said it has an ongoing dialogue with the FCA.
Plus500 said it has a comprehensive remediation plan to re-enable the trading accounts of its currently suspended customers. The company said around 40 staff will be working on the process over the company weeks. Plus500 also indicated that it is continuing to re-approve existing costumers providing proper AML documentation.
The company said it is engaged in discussions with the skilled person, who reviewed its anti-money laundering controls, regarding its onboarding process for new customers.
Plus500’s current situation is regrettable says CEO
Plus 500 CEO Gal Haber assured customers that they are doing everything in their power to resolve the issues. He said, “Customer balances are protected in segregated accounts with major international banks, and we are mobilizing significant resource to complete the verification project.”
He added, “The current situation is regrettable, and we apologize to customers whose accounts are frozen. We intend to resolve these issues as short a time possible.”
Furthermore, Haber assured that company’s shareholders that they are doing everything in their power to protect the market position of Plus500 in the United Kingdom. Plus500 is expected to provide more update on May 27.
Odey Asset Management, the second-largest shareholder of Plus500 increased its stake in Plus500. The firm owns 15.7% in the company.
Investors shorting Plus500
Cable Car Capital, the hedge fund managed by Jacob Ma-Weaver, a former analyst at Amici Capital is shorting the shares of Plus500 with a target price of 76 pence.
Valiant Capital Management and Ennismore Fund Management are also shorting the stock.
Plus500 is a brokerage firm that offers online trading services to retail customers. Last week, Gotham Research warned that the stock price of the company will decline further.
