• Neteller Issues Press Release, Working To Return Funds

    08 February 2007

    Newspaper

    PRESS RELEASE

    8 February 2007 – NETELLER Plc (LSE: NLR), the leading global independent online money transfer business, today issued the following update with regard to its US business and criminal charges against two of its founders.

    On 19 January 2007, at the request of the Group, the Group’s legal advisers met with representatives of the United States Attorney’s Office for the Southern District of New York (“USAO”) to clarify the Group’s position with respect to the complaints brought on 16 January 2007 against two of the Group’s founders, Mr. Stephen Lawrence and Mr. John Lefebvre. Neither are current employees or directors of NETELLER. In that meeting, the Group pledged to cooperate with the USAO, indicated it was prepared to begin document production promptly and discussed a potential mechanism for arranging an orderly repayment of funds to US customers.

    The discussions between the Group’s legal advisers and the USAO are ongoing. The Group is, under advice of its legal advisers, commencing production of documents and intends to cooperate with the USAO in its investigation.

    Following upon the complaints dated 16 January 2007, banks in the US began declining to permit transactions involving the Group through accounts maintained at one or more automated clearinghouses in the United States. Additionally, the Group has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to the Group’s transactions. To the best of the Group’s knowledge, it believes that the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed US$ 55 million. These funds were largely in the process of being transferred from the Group to its US customers or vice versa.

    As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the Group is currently unable to make payments to US customers. Nevertheless, the Group is in discussions with the USAO to manage an orderly return of funds to US customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group’s expense, to assist in this process and to examine the Group’s financial position. “The return of funds to our US customers is a top priority for NETELLER” said Ron Martin, Group President and CEO. US customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined.

    To the Group’s knowledge, no criminal action or proceeding has been brought against the Group, its current officers or directors by the USAO. Nevertheless, there can be no assurance that the Group will not be charged in a criminal action at some subsequent time. The Group intends to work with the USAO to seek a negotiated resolution of any allegations relating to its US activities. Any resolution of this matter may lead to potential sanctions against the Group including material financial penalties, fines and forfeitures.

    It is emphasized that in line with the Group’s standard business practices for all customers, funds held by the Group for US customers are held in segregated trust accounts. The Group’s own cash position remains strong and the Group currently has sufficient working capital to fund all its customers’ balances as well as ongoing requirements of the business.

    NETELLER remains committed to developing its business in line with its stated strategic objectives including geographical and product diversification for all markets. The Group will focus on its continuing business and the opportunities available in the growing markets of Europe, Asia and the Americas outside of the United States. Since the Group’s withdrawal from the US market on 18 January 2007, average daily new account sign-ups of new customers from non-US markets has been around 1,400. This compares to average daily sign ups of 3,303 for the year to 31 December 2006. Daily fee revenue since 18 January 2007 has averaged over US$ 200,000 per day (excluding any revenues from Netbanx, 1-Pay and interest income). These metrics demonstrate the resilience of the Group’s ongoing business. NETELLER customers not resident in the US continue to be minimally affected by this withdrawal from the US market.

    In view of the continuing uncertainty, the Group’s shares will continue to be suspended from trading on AIM for the time being. Further announcements will be made as appropriate.

    Related News

    • 16 June 2020

      Play'n GO Will Be Launching Three New Titles At The Same Time!

      Play’n GO is one of those providers who are bringing new slots to the gambling market weekly. However, launching not one, but three releases simultaneously managed to get us by surprise. A triple rollout is announced for the midst of June, freshening up the iGaming scene with a trio of brand-new titles into the market. Software providers constantly come up with fresh strategies to compete with other studios and ultimately beat the competition.

      Read full article
    • 31 May 2020

      Spearhead Studios Launches Book of Gates Slot Exclusively Developed for Wunderino Casino

      One of the most innovative gaming suppliers, Spearhead Studios, has announced the release of its bespoke new title - Book of Gates slot. The game has been launched exclusively on the successful German online casino: Wunderino. It features an Egyptian theme and follows the adventures of British explorer, Sir Percy Forcet, on a quest to discover the treasures hidden deep inside the tomb of a powerful pharaoh, using the ancient scroll as his guide.

      Read full article
    • 28 May 2020

      Pragmatic Play Turns On The Heat With Its Hot to Burn Slot

      A new release from one of the leading suppliers of gaming content, Pragmatic Play, is ready to start a fire on the gaming market with its engaging gameplay. The provider has taken the classic fruit machine and spice it up with fiery elements and a quite nice winning potential. How big? Well, the game brings players a possibility to win 1000 times their stake!

      Read full article