Neteller Update...

[permafrost]

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I think our statement is correct,

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Did I miss something, or is this a typo?

[JPFisher55]

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Actually the statement by Neteller indicates that Neteller is voluntarily complying with a federal warrant seizing these funds even though this warrant is not enfoceable in the Isle of Man.
Neteller is clearly cooperating with the DOJ to get the best deal for it and its founders. US customers money is being held hostage by Neteller to get the best deal for it. Neteller could have refused to honor this warrant and fought the DOJ; instead it rolled over to the detriment of its US customers and its shareholders who have seen the value of their shares disappear.

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I think our statement is correct, except by "rolling over" they are actually protecting their employees, executives, and shareholders. The company may actually survive as an asset. If I was on the board of Neteller I would advise the same - as would most people here.

Sadly none of this is surprising.

all our base are belong to Neteller - they hold the cards and are in a fantastic negotiating position.

TT [img]/images/graemlins/club.gif[/img]

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Neteller is only protecting the interests of its founders, directors, officers and controllin shareholders. It clearly cares less about its former US customers, shareholders who bought shares through the LSE and its other employees.

[*TT*]

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I think our statement is correct,

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Did I miss something, or is this a typo?

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their. Typo.

[Nate tha\\\' Great]

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all our base are belong to Neteller - they hold the cards and are in a fantastic negotiating position.

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How so?

Look, the dialog that probably took place here is along the lines of the following:

USAO: "Cooperate with us, shut down your business to US customers, and comply with our due diligence request, and we'll see to it that your PLC remains intact and that you can continue doing business in the European market".

Neteller: "Okay".

I don't see how Neteller "holds all the cards" in that scenario. The USAO would probably have a good chance of litigating Neteller out of business if it wanted to (entirely out of business, not just the US market), but thus far it has not charged Neteller itself with a crime. And it probably will not do so if Neteller cooperates; its goals IMO were (i) to shut out Neteller from the US market; (ii) to intimidate the rest of the industry in the process. Both of these things have already been accomplished, and it holds the only hammer in this situation: the possibility of prosecuting Neteller itself.

Nor do I see how the funds are being held hostage. Neteller cannot really go off an abscond those funds; it would then face potential legal action from the USAO, the British FSA, its shareholders, and possibly its customers, and would probably go bankrupt if it tried to do that. In this regard, US customers are fortunate that Neteller is a publicly-held UK commpany.

There has been NO evidence presented that either side -- Neteller or the USAO -- has an interest in permanently confiscating customer funds. On the contrary, Neteller's press release would suggest that this is one of the common points of the negotiation. Although I think we can expect some lengthy delays, the largest risk to US customers is that Neteller declares bankruptcy, at which point individual customers are fairly low on the food chain. Today's announcement probably LESSENS the risk that Neteller declares bankruptcy, because it means that it is not willing to risk its European business for the sake of having at it with the USAO.

[Sniper]

FWIW, when I read the release, my reaction was... there's nothing new here... except that Neteller is trying to clarify the information that is out there.

[Bob Moss]

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Jebus, americans really do take it up the ass from your own governement. I feel for you all. The whole situation is surreal and tragic.

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Thanks for your concern, but we don't deserve any better.

[Marc H]

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USAO: "Cooperate with us, shut down your business to US customers, and comply with our due diligence request, and we'll see to it that your PLC remains intact and that you can continue doing business in the European market".

Neteller: "Okay".


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Please to 'splain.

What could the U.S. Attorney do to make it untenable for Neteller to do business in Europe?

[Nate tha\\\' Great]

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USAO: "Cooperate with us, shut down your business to US customers, and comply with our due diligence request, and we'll see to it that your PLC remains intact and that you can continue doing business in the European market".

Neteller: "Okay".


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Please to 'splain.

What could the U.S. Attorney do to make it untenable for Neteller to do business in Europe?

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Let's count the ways:

1) It could call for huge fines, which would bankrupt the Company.

2) It could force the resignation or the prosecution of key directors in Neteller, which would hamper its ability to run its own business.

3) It would be a nightmare from a shareholder standpoint, which would also put the company's financial viability at risk.

4) It would undermine the confidence of European consumers in Neteller.

5) It could cause the FSA to revoke Neteller's licenses.

6) It would encourage merchants to discontinue business with Neteller, as there are other companies in place with cleaner rap sheets.

The USAO cannot bring complaints against transactions originating in Europe. Short of that, it has a lot of ways to make Neteller's life very, very difficult.

[Nate tha\\\' Great]

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FWIW, when I read the release, my reaction was... there's nothing new here... except that Neteller is trying to clarify the information that is out there.

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I know, and I don't know what people were expecting. Look at how quickly Neteller withdrew its services from the US market. It was obvious that they were going cooperate with the USAO's investigation. And frankly, I think Neteller's *not* being cooperative would have been much more troublesome from the standpoint of consumers getting their money back.

[Marc H]

I can see (3) and (4), and they can fight a PR war (6).

But why would NT (1) agree to pay huge fines, or (2) accede to resignation demands, originating from the American government, when it is not an American company?

Re (5), the FSA is a British government entity, right? in charge of regulating financial institutions? I can see them agreeing to look into Neteller at USAO's urging, but not simply revoking licenses just because the Americans say so.