Delay in Freetrade Crowdfunders' Payout Distribution: What Caused the Near-Monthlong Delay?
Revised Article:
Freetrade investors bitterly endure a month-long delay in receiving their payouts following the announcement of the platform's acquisition by IG Group in early January.
This frustration comes despite the acquisition being finalized on April 1st, with funds received by IG Group on the 4th. The hold-up, seemingly not uncommon in post-acquisition scenarios, can be attributed to administrative processes, compliance requirements, or payment infrastructure adjustments.
Online trading platform IG Group scooped up Freetrade for an impressive £160 million in January.
According to This is Money, Crowdcube, the crowdfunding platform responsible for backing Freetrade, was privy to the shareholder register two weeks prior to the transaction's closure. Given the complexity of managing over 22,000 individual shareholders, an increased number of steps may have been necessary to ensure a smooth payout process.
A Crowdcube representative acknowledged the delay, confirming that as a Financial Conduct Authority-regulated entity, they must conduct Anti-Money Laundering checks before every transaction. This process, they assert, is non-negotiable and aims to prioritize consumer security.
One disgruntled crowdfunder, John Haagensen, expressed his dissatisfaction after receiving his payout of around £15,000 on a Friday. Perceiving the hold-up as unfair, he noted the potential loss of interest for many investors.
Matthew, another Freetrade investor, received his payment at 3 am on Monday. In the time leading up to his payment, Matthew lamented the daily cost of the delay, expressing confusion over the necessity of protracted Anti-Money Laundering checks. Despite being paid, Matthew maintained a pessimistic view, feeling that crowdfunders like himself received a raw deal compared to institutional investors.
Investors have suffered losses as a result of the acquisition, with some receiving as little as £1.19 per share - significantly less than their initial investment of £2.60 per share. As of last Friday, the majority of crowdfunders had been paid, but those who had yet to provide their banking information still waited for their funds.
For further insights on investing platforms, check out:
- AJ Bell
- Hargreaves Lansdown
- interactive investor
- InvestEngine
- Trading 212
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The fury among Freetrade’s crowdfunders intensifies as the chief executive addresses concerns on an investor forum[3]. Note that this piece alludes to a 2022 scenario, but attributed delays may not be entirely consistent with the data available in the specified sources. Confirm details by consulting primary sources or official investor communications.
- Freetrade's acquisition by IG Group in early January resulted in a delay for investors to receive their payouts, despite the acquisition being finalized on April 1st.
- Crowdcube, the crowdfunding entity responsible for backing Freetrade, had access to the shareholder register two weeks prior to the transaction's closure, owing to the complexity of managing over 22,000 individual shareholders.
- Acknowledging the delay, a Crowdcube representative stated that, as a Financial Conduct Authority-regulated entity, they must conduct Anti-Money Laundering checks before every transaction, a process they assert is non-negotiable to prioritize consumer security.
- Despite large entities like AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212 offering a range of investing platforms, many investors expressed dissatisfaction over the delay and losses they incurred as a result of the Freetrade acquisition.
