Plus500 account freezes have happened before

16 June, Lagos – Following the issues being faced by the Israeli broker, Plus500, we recently reported that 10,147 customers have updated their identification documents to reactive their accounts. Also, about 8,457 have been reactivated since it began overhauling regulation. Of the reactivated accounts, only about 5% of the clients, precisely 457 decided to withdraw their funds. And 61% of those who have been unfrozen have started trading again. The company still has at least 14,000 frozen accounts, clarifying today that 23,000 people have logged in to the site since the account freeze began in the middle of last month.

We have learned that the recent Plus500 account freezes isn’t the first of such an occurrence for plus500. Back in October 31, 2014, the firm specifically requested the right to freeze accounts from the Financial Conduct Authority. Reason being that some clients where determined to be non-existent due to a lack of verified adequate customer due diligence information’. At the time, only a few accounts where affected, and most where reactivated after adequate steps where taken and the required documentation was submitted by the clients.

We have also received a document showing the details of the last request by Plus500 for the freeze of client accounts. Below is an excerpt from the document:

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“in relation to existing clients, prohibit all account activity unless and until it has (a) advised all active clients in writing by midnight 15 May 2015 to the most recent email and/or postal address that they are required to complete a new questionnaire and, where applicable, provide additional customer due diligence documentation; and (b) advised all clients which are not active clients in writing by midnight on 26 May 2015 to the most recent email and/or postal address that they are required to complete a new questionnaire and, where applicable, provide additional customer due diligence documentation; (c) received the completed questionnaire and any additional customer due diligence that may be required to ensure compliance with procedures and the Money Laundering Regulations 2007”

The full document can be viewed here.

The broker got a lifeline from Teddy Sagi, following his company's bid (Playtech’s) to successfully acquire a controlling stake in the ailing Plus500, the agreement reached by the board of the companies values the broker at 400 pence per share in cash. The deal is yet to be completely sealed though as Odey Asset Management has recently opposed the deal.

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