Intrade auditors flagged unusual payments last month to ex-chief
Published 12/03/2013 | 05:00
THE auditors of near collapsed Dublin-based predictions website Intrade expressed concerns about alleged payments to former chief executive John Delaney last month, it has emerged.
Brian Dunne of the accountants Caulfield Dunne could not give a "true and fair view" of Intrade's 2011 accounts, citing payments apparently made to the late Mr Delaney, without the proper paperwork.
Mr Delaney, who had been chief executive since 1999, died while climbing Mount Everest in May 2011.
The popular website, which allowed people to bet on the probability of an event happening, ceased trading yesterday.
In a statement, the company directors said that due to circumstances "recently discovered" it must immediately cease trading activity.
"These circumstances require immediate further investigation, and may include financial irregularities which in accordance with Irish law oblige the directors to cease exchange trading on the website, settle all open positions and calculate the settled account value of all accounts and stop all banking transactions on company accounts," the company said.
The firm is carrying out a further investigation and will take more action if necessary, it said.
Customers cannot access the funds they have locked up in the accounts until the investigation is completed. Intrade said it is "not able to provide telephone support or live help services at this time", instead referring customers to an email: firstname.lastname@example.org.
The company's most recent accounts show that accumulated losses nearly doubled to $1.6m (€1.2m) at the end of 2011. A note appended to the accounts said, "in a review of the accounts and preparation for audit, insufficient documentation was available regarding payments made into bank accounts belonging to Mr Delaney and other third parties".
The current directors were appointed in late 2011 and early 2012 so were "not able to comment" on the company's book- keeping before then.
Intrade built up a huge reputation, especially in America, by offering customers the chance to predict whether an event would or wouldn't happen. By bringing so many different predictions together it would calculate a percentage of how likely it was to happen.
Intrade was especially popular during last year's US presidential election, predicting Barack Obama would be re-elected. Up to yesterday it had Archbishop Angelo Scola the favourite to be the new Pope, with a 25pc chance of victory.
Despite its success in America it seemed to be living on borrowed time in that country. Last year the Commodities Futures and Trading Commission banned it from taking money from clients in the US, claiming it was running an unregulated market.
Traffic to the site is believed to have plunged after that decision.
It is the latest Irish-based financial firm to apparently fail in cloudy circumstances. Last year, Bloxham Stockbrokers shut its doors amid accounting irregularities.
Even though it is based in Dublin, Intrade is not regulated by the Central Bank of Ireland.