Feds charge Intrade with allowing illegal bets

WASHINGTON U.S. regulators on Monday sued Intrade, the online prediction market that gained popularity as an informal oddsmaker for the presidential election, saying it illegally let customers bet on future economic data, the price of gold and even acts of war.

The Commodity Futures Trading Commission said in a complaint in federal court that Intrade and its operator solicited customers to trade investment contracts that technically are options. Options must be traded on approved, regulated exchanges.

"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" laws and rules enforced by the agency, CFTC enforcement director David Meister said in a statement.

By requiring that options be traded on approved exchanges, Meister said, regulators can "police market activity and protect market integrity."

Intrade did not respond to an emailed request for comment.

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It was unclear whether regulators believe that all trades on Intrade by U.S. investors are illegal. The CFTC said it would not comment further because the matter was in litigation.

Intrade is known for allowing bets on sports and other high-profile events. The prices at which customers are willing to make those bets are cited as informal odds.

For example, on Monday the site gave "Argo" a 28.5 percent chance of winning the Oscar for best picture and assigned a 19 percent chance that the United States or Israel would launch an airstrike against Iran by June 30.

The CFTC oversees markets for futures and options, investments that allow people to bet on the future prices of commodities like grain and oil. Those contracts help farms, airlines and other businesses to protect themselves against unexpected price swings.

In the complaint, the CFTC alleged that Intrade, based in Ireland, had illegally solicited everyday U.S. investors to use the website between September 2007 and June 25 of this year.

Intrade and its operator, Trade Exchange Network Ltd. (TEN), falsely claimed in annual reports that the contracts were not being sold to ordinary U.S. customers, the CFTC said. Regulators want the companies to pay fines and return profits that were obtained illegally.

Intrade users reported on Twitter that the site already blocks them from trading contracts related to the prices of oil and gold.

One of them, Joe Schilling, posted an image of an email he said was sent by Intrade in 2009, stating that crude oil and gold contracts were unavailable to U.S. users "due to a regulatory request" from the CFTC.

TEN settled similar charges of soliciting U.S. investors in 2005. In an order filed with that settlement, the CFTC said that U.S. customers accounted for up to 40 percent of Intrade's total customer base. TEN paid $150,000 and agreed to halt further violations.

Under the settlement, TEN agreed to use pop-up windows to tell U.S. customers which bets were not available to them. It said it would cooperate in any future investigations.

Monday's complaint includes charges that TEN violated that earlier settlement. The company nevertheless used Intrade to offer illegal options including on the future prices of gold and oil, changes in the unemployment rate and measures of U.S. economic output.

[anyyname]

How intelligent can you be when you have to cheat virtually everyone to make an income that supports your self-described sophistication. That sense of entitlement is a symptom of narcissistic personality disorder, a mental illness that is epidemic in 'upper class' social circles. They should call it 'sociopath class'. 'Upper' implies that many of it's members aren't pathologically-lying gutter trash dressed in thousand dollar suits.

[anyyname]

The Commodity Futures Trading Commission/USDOJ is all about protecting U.S. Citizens from fraud when an Ireland-based company runs what amounts to a small-change private dice game but couldn't effectively prevent the mortgage-backed security fraud that Wall Street perpetrated against the country resulting in the still-ongoing recession/depression.

I'm very tired of supporting this government-elite citizen/corporation complex with real money derived from my real, arduous work so that it can continue to create rules that punish the 99% while unjustly enriching it's elite membership of influentials. The States should unite and force the dissolution of this monster they inadvertently created with the Constitution and reunite as the 'united States' instead of the fraud that is the 'United States' government. This infestation created by systematic and fraudulent staffing of key positions in government with individuals specifically chosen for their loyalty to an influential few is the reason that the terms 99% and 1% have come into popular usage.

We need people in those positions who have realistic priorities developed in the best interest of the entire population, not cronies working for a private group of scummy wealth-hoarders. This 'government' of the few will destroy what is left of our home if we do nothing to stop it. I would bet on it but am now prohibited from doing so by my 'government'. They won't even let me enjoy a small profit on correctly predicting the existence of their master plan for my extermination. You know how narcissists operate. Once they've tasted the blood of those they've demonized for profit, they just can't get enough.

If your going to unjustly victimize someone for personal gain, make sure you characterize them as a criminal first. Otherwise, people might think that you are the criminal. That could have a negative influence on profits.

[anyyname]

The Commodity Futures Trading Commission/USDOJ is all about protecting U.S. Citizens from fraud when an Ireland-based company runs what amounts to a small-change private dice game but couldn't effectively prevent the mortgage-backed security fraud that Wall Street perpetrated against the country resulting in the still-ongoing recession/depression.

I'm very tired of supporting this government-elite citizen/corporation complex with real money derived from my real, arduous work so that it can continue to create rules that punish the 99% while unjustly enriching it's elite membership of influentials. The States should unite and force the dissolution of this monster they inadvertently created with the Constitution and reunite as the 'united States' instead of the fraud that is the 'United States' government. This infestation created by systematic and fraudulent staffing of key positions in government with individuals specifically chosen for their loyalty to an influential few is the reason that the terms 99% and 1% have come into popular usage.

We need people in those positions who have realistic priorities developed in the best interest of the entire population, not cronies working for a private group of scummy wealth-hoarders. This 'government' of the few will destroy what is left of our home if we do nothing to stop it. I would bet on it but am now prohibited from doing so by my 'government'. They won't even let me enjoy a small profit on correctly predicting the existence of their master plan for my extermination. You know how narcissists operate. Once they've tasted the blood of those they've demonized for profit, they just can't get enough.

If your going to unjustly victimize someone for personal gain, make sure you characterize them as a criminal first. Otherwise, people might think that you are the criminal. That could have a negative influence on profits.

[mjvwsr]

Our Justice Dept doesn't have anything more important to worry about? Please quit trying to protect us from ourselves.