Plus 500 shares plummet after customer accounts frozen
Israeli spread betting company Plus 500 has suffered a significant drop in its share price after it was forced to freeze thousands of customer accounts in order to carry out money laundering checks.
The firm’s main UK subsidiary, which accounts for more than half of the firm’s total revenue, has suspended accounts to undertake a “complete review” of its customer details in order to avoid breaching regulation set by the UK Financial Conduct Authority.
Plus 500 had only been carrying out ‘know your customer’ checks when users were withdrawing funds, rather than at the stage of opening an account.
The suspension of these accounts leaves more than half of Plus 500’s customers in the UK unable to trade, deposit or withdraw until they provide proof of their identify and address.
The Independent newspaper reports that as a result of the move, shares in Plus 500 fell from 478p at the opening of trading on Friday morning to 272p by the end of the day.
The slump meant that Plus 500’s value dropped by approximately £300 million (€417.4 million/$469.8 million) in just one day.
The hit comes after a successful period for Plus 500, which was able to increase its customer base by more than 100,000 last year before signing up almost 33,000 new customers in the opening three months of 2015.