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Plus500

From Wikipedia, the free encyclopedia

Plus500
Company typePublic
IndustryOnline trading
Founded2008 (2008)
Headquarters
United Kingdom Edit this on Wikidata
Key people
  • Jacob Frenkel (Chairman)
  • David Zruia (CEO)
[1]
ServicesOnline trading platform
RevenueDecrease US$ 726.2 million (2023)[2]
Decrease US$ $336.4 million (2023)[2]
Decrease US$ $271.4 million (2023)[2]
Websiteplus500.com

Plus500 is an Israeli-founded London-based firm that provides online trading services in contracts for difference (CFDs), share dealing, futures trading and options on futures. The company has subsidiaries in the UK, Cyprus, Australia, Israel, Seychelles, Singapore, Bulgaria, Estonia, the United States, Dubai, Indonesia, the Bahamas and Japan. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

History

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Foundation and early development

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The company was founded in 2008 by six alumni of the Technion – Alon Gonen, Gal Haber, Elad Ben-Izhak, Omer Elazari, Shimon Sofer, and Shlomin Weizmann – with an initial investment of $400,000.[3][4][5]

Plus500 first launched a Windows-based platform. A web version followed in 2010, with iOS and Android apps launching in 2011 and 2012, respectively. By Q1 2013, 40% of transactions were conducted via mobile devices.[3]

IPO and regulatory issues

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In October 2012, Plus500UK Ltd. was fined £205,128 by the UK's Financial Conduct Authority (FCA) for inaccurate transaction reporting between June 2010 and November 2011, impacting 1,332,000 transactions, of which 189,000 went unreported.[6][7] Operating with a high-automation, low-staff model (40 employees in 2013, growing to 80 by 2015 in Tel Aviv), Plus500 lacked adequate systems, documented procedures, and staff training to ensure compliance.[8][9]

In 2013, Plus500 went public on the Alternative Investment Market of the London Stock Exchange with a market cap of $202 million.[10][11][3] By mid-2013, Plus500's website operated in 51 countries across 30 languages, offering over 1,800 assets.[3] The company launched its Windows Store app in 2014.[12]

In 2014, co-founder Shimon Sofer sold 1.5 million shares for an estimated £4.1 million, causing an 8.7% drop in the share price.[13]

In May 2015, Plus500UK faced a major crisis when the FCA ordered a freeze on all UK accounts as part of an anti-money-laundering review.[14] Unlike traditional brokers, Plus500 allowed customers to start trading with minimal verification and required complete documentation only upon withdrawal, even enabling account creation through Facebook.[15][16] The account freeze halved Plus500's market value, dropping its share price from £860 million to £459.6 million.[17][18] During this crisis, Plus500's management agreed to sell the company to Playtech, an online gambling company that was expanding into trading, for $703 million, roughly half its pre-freeze valuation. However, in November 2015, Playtech withdrew after failing to secure regulatory approval.[19][20] Following the FCA issues, 72% of affected UK clients resumed trading, though Q2 2015 revenue still declined by 47.5% to $43 million.[21]

2016–2024

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In January 2016, Plus500UK resumed onboarding new customers in the UK.[22] In the same year, Plus500IL Ltd., the company's Israeli subsidiary, received a Trading Arena Licence from the Israel Securities Authority (ISA). In September, Plus500 launched an Apple Watch app to trade and view account details.[23]

In the fall of 2016, Plus500's founders sold 13% of the company's shares, raising £100.75 million but causing a 16% stock drop. They retained a 22% stake.[24]

In December 2017, Plus500's Singapore subsidiary, Plus500SG Pte Ltd., obtained a Capital Markets Services license from the Monetary Authority of Singapore (MAS) to trade in securities and leveraged forex.[25]

In June 2018, Plus500 launched an Economic Calendar, providing global financial events and indicators in partnership with Dow Jones & Company, along with a list of impacted instruments per event.[26] That same month, shares of Plus500 were listed in the main market of the London Stock Exchange, and the company joined the FTSE 250 Index of leading mid-cap firms.[27][28] By 2018, Plus500's trading apps supported 32 languages, including English, German, Italian, Spanish, French, Arabic, and Chinese.[29] By the end of 2018, Plus500 reported a 33% increase in revenue, reaching $437.2 million (£314.7 million) compared to $327.9 million in the previous year. Net profit rose by 70% to $199.7 million.[30]

In 2021, Plus500 appointed Jacob A. Frenkel, former chairman of JP MorganChase International and former governor of the Bank of Israel, as chairman.[31] the company announced its agreement to acquire Cunningham Commodities LLC and Cunningham Trading Systems LLC, finalizing the acquisition by July as part of its expansion into the U.S. futures market.[32][33]

During the summer of 2021, Plus500 opened a new R&D center in Tel Aviv[9] and introduced "Plus500 Invest," a stock-trading platform featuring over 2,000 instruments.[34] By the third quarter of 2021, the company reported having 166,310 active clients[35]

In March 2022, Plus500 acquired Japan-based EZ Invest Securities, specializing in securities and derivatives trading.[36] Later, in September, it launched TradeSniper, a futures trading app for U.S. retail clients.[37]

In August 2024, Plus500 announced plans to return $185.5 million to shareholders through a $110 million share buyback and $75.5 million in dividends. The company benefited from global volatility driven by events like the Covid-19 pandemic, 2022 Russian Invasion of Ukraine, and a conflict in Gaza since 7 October 2023 and expects to benefit from the U.S. elections in November 2024. Plus 500 also intends to focus on expanding into the U.S., UAE, and Japanese markets.[38][39]

Trading licences

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Plus500 operates under various regulatory authorities worldwide. Plus500UK Ltd. is regulated by the FCA (FRN 509909);[40] Plus500CY Ltd. by the CySEC (No. 250/14);[41] Plus500AU Pty Ltd. by the ASIC (AFSL #417727),[42] and also authorized by New Zealand's FMA (FSP No. 486026)[43] and South Africa's FSCA (#47546).[44] Plus500IL Ltd. is authorized by the ISA,[45] Plus500SEY Ltd. by the Seychelles FSA (No. SD039),[46] Plus500SG Pte Ltd. by MAS (License No. CMS100648-1),[47] Plus500EE AS by the Estonian Financial Supervisory Authority (No. 4.1-1/18),[48] Plus500AE Ltd by the Dubai DFSA (F005651),[49] Plus500JP Securities Ltd. by Japan's FSA (No. 156),[50] and Plus500BHS Ltd. by the Bahamas' SCB (SIA-F250).[51]

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Platform failures and financial discrepancies

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Plus500 has faced numerous complaints over platform failures and questionable practices, with reports of clients wrongly accused of market abuse and profitable trades canceled.[52]

In February 2019, The Times highlighted discrepancies in Plus500's financial reporting. While the company's 2017 Annual Report stated it had no net revenues or losses from market P&L in 2015-2017, a later report revealed a $103 million loss from client trading activity in 2017.[53]

Lawsuits and fines

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In October 2017, several hundred former clients filed a lawsuit against Plus500, accusing the broker of failing to manage their money adequately. In addition, the broker's platform operated with numerous failures, due to which clients were often unable to close positions when they wanted to.[54]

In April 2017, Plus500 paid a €550,000 fine to Belgium's FSMA for offering CFDs without the required prospectus and failing to submit ads to the regulator. Although Plus500 denied any wrongdoing, it complied with FSMA's demand to close its Belgian website and inform Belgian clients of the issue, offering free account closures.[55]

In 2021, the Tel Aviv District Court approved a $29 million class action against Plus500 Israel. It was alleged that during the Brexit referendum's volatile aftermath, Plus500 restricted trading in put options for 90 minutes, selectively allowing call options, to prevent customer profits.[56][57][58]

On 14 September 2023, a second class action was filed in Australia, alleging that Plus500 engaged in misleading and unconscionable conduct by selling high-risk investments that led clients to financial losses from November 2017 to March 2021.[59][60][61]

Marketing and sponsorships

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Plus500 distinguishes itself from traditional brokers through an affiliate marketing model and significant investment in web advertising — over £48 million in 2014 alone — targeting potential clients on platforms like Facebook and Instagram. Aiming to attract beginner traders, Plus500 simplified its marketing materials, while many competitors require tests and offer educational seminars.[17]

In 2015, Plus500 signed a sponsorship deal with Atlético de Madrid, becoming its main sponsor until 2022.[62] Later that year, Plus500 became the club's main sponsor and kept that title for the next 7 years until June 2022.[63] The company expanded its sports sponsorships in 2016 with the ACT Brumbies of Super Rugby,[64] in 2020, signed with three football clubs: Swiss Super League champions Young Boys,[65] Poland's champions Legia Warsaw,[66] and Serie A club Atalanta.[67] In 2023 beIN Sports blacked out Atalanta and Young Boys broadcasts due restrictions on CFD advertising by the Autorité des marchés financiers (AMF)[68]

In 2022, Plus500 entered a multi-year partnership with the NBA's Chicago Bulls[69] and launched an advertising campaign featuring actor Kiefer Sutherland in the United Kingdom, Italy, the Netherlands, Germany, and Australia.[70]

References

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  1. ^ "Interview With Plus500 Manager David Zruia". Retrieved 14 September 2011.
  2. ^ a b c "Annual Results 2023" (PDF). Plus500. Retrieved 19 February 2024.
  3. ^ a b c d "Plus500: Absolutely Israeli". Globes. 18 August 2013. Retrieved 7 September 2018.
  4. ^ "Plus500 Launch of Plus500 Invest, a New Share Trading Platform". Financemagnets.com. 22 July 2021. Retrieved 15 May 2022.
  5. ^ "Plus500 completes purchase of Cunningham as it plots US growth". Morningstar. 20 July 2021. Retrieved 15 May 2022.
  6. ^ "FSA issues fines totaling £250,000 on Plus500UK Limited (Plus500) and James Sharp and Company (James Sharp)". FCA. 24 October 2012. Retrieved 18 October 2024.
  7. ^ "FCA Transaction reporting fines". Financial Services Authority. 30 May 2016. Retrieved 15 September 2018.
  8. ^ McCrum, Dan (26 January 2015). "The trading magicians of Plus500". Financial Times. Retrieved 22 October 2024.
  9. ^ a b "Plus500 to Establish R&D Centre in Tech Hub Tel Aviv". Finance Magnates. 4 March 2021. Retrieved 31 October 2024.
  10. ^ Finberg, Ron (2 July 2013). "CFD Broker Plus500 Announces IPO Plans on London's AIM". Finance Magnates. Retrieved 29 October 2024.
  11. ^ "Plus500 Decides To Go Public With IPO". www.fxempire.com.
  12. ^ "Annual Report 2014" (PDF). Plus500. p. 13. Retrieved 7 September 2018.
  13. ^ Tsipori, Tali (28 January 2014). "Plus500 falls after founder sells 1.5m shares". Globes. Retrieved 29 October 2024.
  14. ^ "London-listed spreadbetting firm Plus500's stock bombs after freezing accounts". Business Insider. 18 May 2015. Retrieved 7 September 2018.
  15. ^ McCrum, Dan (18 May 2015). "Plus500: the big freeze". Financial Times. Retrieved 18 October 2024.
  16. ^ Mizrahi, Avi (18 May 2015). "What Really Caused Plus500's Share Price to Crash Today?". Finance Magnates. Retrieved 29 October 2024.
  17. ^ a b Williams-Grut, Oscar (5 June 2015). "Plus500 may have been brought down by its rivals, who hated the way it simplified the business". State Journal-Register. Retrieved 29 October 2024.
  18. ^ "Plus500 shares fall 36% after client accounts suspended". Financial Times. 18 May 2015. Retrieved 29 October 2024.
  19. ^ "Playtech folds on Plus500 deal after regulatory concerns". Financial Times. 23 November 2015. Retrieved 7 September 2018.
  20. ^ Slav, Irina (23 November 2015). "Breaking: Playtech Abandons Plus500 Deal amid Regulatory Concerns". Finance Magnates. Retrieved 29 October 2024.
  21. ^ Golovtchenko, Victor (30 June 2015). "Plus500 Revenues Almost Halved in Q2 Compared to Previous Quarter". Finance Magnates. Retrieved 29 October 2024.
  22. ^ Finberg, Ron (6 January 2016). "Plus500 Welcomes Back New Customers to UK Entity". Finance Magnates. Retrieved 31 October 2024.
  23. ^ ""On Sunday we release our supported Apple watch app! plus 500"". Plus 500. Retrieved 7 September 2018.
  24. ^ Golovtchenko, Victor (28 September 2016). "Breaking: Plus500 Founders Set to Sell 13% of the Company's Shares". Finance Magnates. Retrieved 31 October 2024.
  25. ^ "Grant of operating licence in Singapore". FT.com. 11 December 2017. Retrieved 7 September 2018.
  26. ^ "Check our Economic Calendar to follow financial events, anticipate possible market movements and make trading decisions accordingly". Plus500. 4 June 2018. Retrieved 7 September 2018.
  27. ^ Murphy, Hannah (26 June 2018). "Cryptocurrency surge propels 500 into the main market". Financial Times. Retrieved 3 July 2018.
  28. ^ "Plus500 Officially Joins FTSE 250 Index". 6 September 2018. Retrieved 11 May 2021.
  29. ^ "Plus500 Ruthlessly Reviewed & Rated at Commodity.com". Commodity.com. Retrieved 22 February 2018.
  30. ^ Morrison, Caitlin (14 February 2018). "Plus500 shares surge as it hikes dividend after growing revenueJ.P. Morgan Chase International". City AM. Retrieved 31 October 2024.
  31. ^ "Online trading platform Plus500 appoints Jacob Frenkel as its new chairman". Calcalistech.com. 25 March 2021. Retrieved 10 May 2021.
  32. ^ "Cunningham Acquisition Announcement" (PDF). plus500.com. Retrieved 15 August 2021.
  33. ^ "Plus500 enters the market with the purchase of Cunningham". bitfinance.news. 21 April 2021. Retrieved 11 May 2021.
  34. ^ "Plus500 Launch of Plus500 Invest, a New Share Trading Platform". Finance Magnates. 22 July 2021. Retrieved 31 October 2024.
  35. ^ "Scam Broker Investigator; Plus500 Review Pros & Cons". Scam Broker Investigator. 30 December 2021. Retrieved 30 December 2021.
  36. ^ "Plus500 enters Japan with acquisition of EZ Invest Securities". MorningstarUK. 21 March 2022. Retrieved 21 March 2022.
  37. ^ "Plus500's Management Team Held the Company's First Ever Capital Markets Day Event". Finance Magnates. 22 September 2022. Retrieved 31 October 2024.
  38. ^ Kalia, Yamini (19 August 2024). "Plus500 sees annual results above market view, shares hit record high". Reuters. Retrieved 31 October 2024.
  39. ^ "Plus500 powers to all-time high on guidance upgrade and bumper returns promise". Shares Magazine Co UK. 19 August 2024. Retrieved 31 October 2024.
  40. ^ "FCA Plus500UK Ltd". Financial Conduct Authority. Retrieved 1 August 2019.
  41. ^ "CySEC Plus500CY Limited". CySEC. Retrieved 1 August 2019.
  42. ^ "ASIC Connect - Plus500AU PTY. LTD". Australian Securities & Investments Commission. Retrieved 18 May 2021.
  43. ^ "Plus500 Granted Operating License by New Zealand FMA". financemagnates.com. 3 October 2016. Retrieved 18 May 2021.
  44. ^ "Forex Brokers Regulated By FSCA 2021". compareforexbrokers.com. Retrieved 18 May 2021.
  45. ^ "ISA PLUS500IL LTD". ISA. Retrieved 1 August 2019.
  46. ^ "Plus500 Secures Seychelles Licence, Closes 2019 on Strong Footing". financemagnates.com. 12 February 2020. Retrieved 18 May 2021.
  47. ^ "MAS Plus500SG PTE. LTD". MAS. Retrieved 1 August 2019.
  48. ^ "Plus500 Gains a New Regulatory License in Estonia". Finance Magnates. 14 February 2022.
  49. ^ "London Stock Exchange". londonstockexchange.com.
  50. ^ "Plus500 Enters Japanese Market, Acquires EZ Invest Securities". Finance Magnates. 21 March 2022.
  51. ^ Nikolova, Maria (8 January 2024). "Plus500 generates FY23 revenues ahead of market expectations". FX News Group.
  52. ^ "Giambrone calls for claimants in global fight against Plus500". Giambrone. 19 September 2017. Retrieved 31 October 2024.
  53. ^ Hosking, Ben Martin. "Plus500 'may have misled shareholders' over losses". The Times. Retrieved 15 February 2019.
  54. ^ "Bitcoin and share trading app Plus500 faces litigation over 'rigging' claims". ABC. 21 October 2017. Retrieved 31 October 2024.
  55. ^ Patterson, Jeff (25 April 2017). "Breaking: Plus500 Settles with Belgium Regulator for €550K". Finance Magnates. Retrieved 31 October 2024.
  56. ^ Grinzaig, Avishai (25 October 2021). "Court approves class action on alleged Plus500 manipulation". Globes. Retrieved 31 October 2024.
  57. ^ "Trading Firm Plus500 Facing $29 million Class Action Lawsuit". Calcalist. 26 March 2018. Retrieved 31 October 2024.
  58. ^ Sherman, Gabriel (26 October 2021). "Class Action Suit Against Major Broker Moves Forward". Daily Forex. Retrieved 31 October 2024.
  59. ^ Shome, Arnab (8 February 2024). "CFDs on Trial: IC Markets Faces Class-Action Lawsuit in Australia". Finance Markets. Retrieved 31 October 2024.
  60. ^ "Plus500 Class Action". CASL Governance Ltd. Retrieved 18 October 2024.
  61. ^ "New class action targets online trader Plus500 over CFDs". Lawyerly. 19 September 2023. Retrieved 31 October 2024.
  62. ^ "Atlético de Madrid Main Partner". Atletico de Madrid. Retrieved 30 May 2021.
  63. ^ "Plus500 and Atletico Madrid end long term relationship". Finance Magnets. 14 June 2022. Retrieved 8 August 2022.
  64. ^ "Plus500 Signs Official Sponsor of Brumbies". Financial Times. Retrieved 30 May 2021.
  65. ^ "BSC Young Boys secures Plus500 partnership". Insider Sport. 4 June 2020. Retrieved 30 May 2021.
  66. ^ "Plus500 reaches sponsorship deal with Legia Warsaw". Share Cast. Retrieved 30 May 2021.
  67. ^ "Plus500 is Atalanta B.C. main sponsor". Atalanta. 19 August 2020.
  68. ^ "BeIN hampered by French legislation over Plus500 sponsorship in Champions League". SportBusiness. 19 September 2023. Retrieved 29 October 2024.
  69. ^ "Plus500 and Chicago Bulls announce multi-year global partnership". Calcalist. 4 October 2022.
  70. ^ "Kiefer Sutherland to Front New International Advertising Campaign for Plus500". Finance Magnates. 14 June 2022. Retrieved 29 October 2024.
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