Shares in the London Stock Exchange listed financial company, Plus 500, crashed Monday after one of the world's most famous firms was forced to freeze the accounts of thousands of customers, sending shares down by 45%.
Reasons for the freeze vary but speculation is that several months ago The London Times had suggested that the company was under the U.K. watchdog's watchful eye. Another rumor was that the company had failed to pay its customers dividends for the last month.
A different theory has it that it could no longer compete with another Israeli based company, IG Group (IGG), which offers many of the same services.
According to Plus500 management, the blame is "human error," and it cites certain documents scanned in investigating anti-money laundering which were illegible.
Saved by the Fund
Whatever the reason, Plus500 may be in for a reprieve. Odey Asset Management, a $13.2 billion hedge fund headed by Crispin Odey who was married for a short time to Rupert Murdoch's eldest daughter, made headlines today by buying up an additional 1.6 million shares in the company, bringing its share of the business to 14%.
This surprise purchase by Odey Asset Management's may be a vote of confidence in Plus500. Or the management team of the fund may have taken advantage of the low rate as a lucrative way to boost up its position at a bargain basement prices.