Shares of Optimal Group Inc. fell sharply Monday after
the Montreal-based online payment processor said it
is responding to an information request from the U.S.
Attorney's Office in the Southern District of New
York in connection with an ongoing investigation of
the Internet gambling industry.
The
company also said the U.S. Attorney's Office issued
seizure warrants for certain company funds.
Optimal
shares plunged 84 cents, or 9.5 percent, to $7.97
in morning trading. The stock fell from a high of
$15.58 in May 2006 to a low of $7.45 in late January
and has traded below $10 since.
The
warrants have been issued against about $4.2 million
that Optimal's FirePay Ltd. affiliate has on deposit
in a reserve account and about $15 million Optimal
Payments has on deposit in a money market account.
The
company said it is in the process of responding the
voluntary request for information by the U.S. Attorney's
Office, and was assured the warrants don't affect the
company's ongoing discussions with the government.
In
October 2006, Optimal said the U.S. government's passage
of the Unlawful Internet Gambling Enforcement Act
would significantly hurt its business, certain of
which process payments for online gambling sites.
The
Act prohibits gambling businesses from accepting any
financial payments in connection with unlawful Internet
gambling, and directs the U.S. Federal Reserve and
Treasury Department to develop regulations to direct
financial institutions to identify and block certain
transactions connected with unlawful Internet gambling.
