Plus500 admits error in 2017 accounts
The online trading platform’s shares tumbled on the news.
Shares in Plus500 tumbled after the online trading platform admitted a 103 million US dollar (£80m) “drafting error” in its 2017 accounts.
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Shares in the company closed down 12% on Friday to 921.5p.
The Israeli-based broker, which is listed on London’s FTSE 250 Index, said the 103 million-dollar hit was due to “strong client trading performance, particularly in the final quarter” of 2017.
It also confirmed that it incurred a negative revenue impact of 19.5 million dollars for 2016.
Plus500 said there was a “drafting error on page 44 of the 2017 accounts”.
“The 2017 accounts state that ‘In 2017, as in 2016 and 2015, the company did not generate net revenues or losses from market P&L (profit and loss).
“The words ‘or losses’ in this statement were included erroneously.”
The company added that the error does not affect its previously reported revenue, profits or balance sheet numbers.
The news comes after Plus500 saw shares drop by nearly a third on Tuesday after it warned over full-year profits due to a regulatory clampdown across Europe.
The company said 2019 profits are likely to be “materially” lower than expected due to a sales hit from new EU regulations combined with plans to maintain marketing spend.
It had also posted a near doubling of pre-tax profits to 503 million dollars for 2018, up from 253.4 million dollars in 2017 and revealed that the new rules meant it would not see a repeat of the performance in 2019.
Plus500 offers contracts-for-difference (CFD) that allow investors to take high-risk bets on the future performance of currencies, stocks and cryptocurrencies.
But the European Securities and Markets Authority (ESMA) has been cracking down on retail CFD trading, imposing temporary restrictions in August and extending these for three months from February 1.