Neteller has confirmed reports circulating earlier this week that US authorities have seized funds related to US transactions.
In a statement released to the London Stock Exchange this morning, the payment processor said that the United States Attorney’s Office (USAO) had obtained court-ordered seizure warrants for “seizing funds pertaining to the group’s transactions”.
The company believes the amount to add up to no more than US$55m. It said the funds were largely in the process of being transferred from the group to its US customers or vice versa.
The company added that banks in the US have begun declining to permit transactions involving the group through accounts maintained at one or more clearing houses in the US.
Neteller said that the group’s legal advisors have met with representatives of the USAO for the Southern District of New York to clarify the group’s position with respect to the complaints brought on 16 January against Stephen Lawrence and John Lefebvre, the company’s founders.
In that meeting, Neteller pledged to cooperate with the USAO and indicated it was prepared to begin document production promptly and discussed a potential mechanism for arranging an orderly repayment of funds to US customers. It said discussions were ongoing.
Neteller added: “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.”
It added that it was in discussions with the USAO about managing an orderly return of funds, under the aegis of a forensic accounting firm.
Ron Martin, chief executive of Neteller, said: “The return of funds to our US customers is a top priority.”
The company said that to its knowledge, no criminal action or proceeding had been brought against the group, its current officers, or directors by the USAO.
It added though: “Nevertheless, there can be no assurance that the group will not be charged in a criminal action at some subsequent time.”
The statement emphasised the group’s standard business practice of holding all customer funds in segregated accounts.
Neteller said it remained committed to developing its business in line with its stated strategic objectives. It added that since the withdrawal from the US market on 18 January, average daily new account sign-ups of new customers from non-US markets had been around 1,400. This compares with a figure for the year to December, 2006 or 3,303. Daily fee revenue since the same date has averaged over $200,000 per day.
The company said its shares would remain suspended while the continued uncertainty persisted.
http://www.egrmagazine.com/item/1590/23/5/3