CFTC accuses Intrade of allowing unauthorized trades

The Commodity Futures Trading Commission (CFTC) accused the online betting site Intrade on Monday of allowing U.S. customers to make illegal trades on the price of gold and other currencies.

In a civil suit filed Monday, the CFTC charges that Intrade and its parent company, Trade Exchange Network Limited (TEN), both of which are based in Ireland, allowed trades outside of exchanges that have been endorsed by the federal government.

David Meister, who heads the CFTC’s enforcement division, said Monday that the civil suit proved that the commission would be assertive in dealing with “prediction” markets, no matter where they’re located.

“The requirement for on-exchange trading is important for a number of reasons, including that it enables the CFTC to police market activity and protect market integrity,” Meister said in a statement.

According to a CFTC release, the complaint, filed in a Washington federal court, alleges that Intrade allowed its American users to make the illegal bets from 2007 until earlier this year. 

The commission also says that TEN broke a 2005 order forcing it to stop allowing those sorts of trades, and accused both Intrade and its parent company of filing false records saying that they were only allowing legal trades.

The CFTC is seeking financial penalties as part of the suit, and wants to force Intrade to give up profits received from what it calls the illegal trades. 

Intrade was frequently cited in recent months for its odds on the presidential election, and customers can bet on a wide range of subjects on the site.