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The Intrade Mystery Continues

Intrade.com has a shortfall of $700,000 in client funds
Intrade.com has a shortfall of $700,000 in client fundsPhotograph by John Lund/Getty Images

Intrade.com, the beleaguered betting website that in March halted trading and froze member accounts amid a probe into financial irregularities, has discovered a shortfall of $700,000 in client funds. The discrepancy bolsters a widespread theory that the Dublin-based company dipped into client accounts. “If member and company accounts were kept separate, it would be impossible to have a shortfall,” says Barnard College economics professor Rajiv Sethi. “This is not just a case of someone walking away with company funds.”

So what exactly transpired? In the somewhat cryptic announcement made to customers last Friday, Intrade director Ronald Bernstein wrote that the company is “very confident” as to what caused the shortfall—but that, for legal reasons, he could divulge no more. In what may or may not be a related piece of information, Bernstein also confirmed that “the Company, if it is able, intends to vigorously pursue two distinct parties for an aggregate amount greater than $3,500,000.”