(Bloomberg) — Trading platform EToro is reimbursing clients for losses after it liquidated positions in Russian supermarket Magnit PJSC in their portfolios for about a penny a share last week.
EToro “will be issuing a one-time reimbursement for the total initial invested amount of real stock positions,” a spokesperson for EToro said. The reimbursements don’t apply to leveraged shares.
Magnit’s shares traded in London have lost more than 99% of their value this year in the wake of Russia’s invasion of Ukraine. Israeli platform EToro, a rival to Robinhood Markets Inc., announced last week that it would liquidate any open client position in Magnit “at the last tradable rate in the market,” and that “the value of the position at the time of closure will be returned to the account balance.”
Disgruntled investors, communicating through a Telegram group, sent complaints about EToro to Britain’s Financial Conduct Authority and consulted with lawyers about next steps, Bloomberg News reported.
EToro, which reached 20 million users around this time last year, said it will remove Magnit from its platform due to “severe” lack of liquidity in the underlying market. The company had said it would review whether it can continue to offer nine other Russian stocks, including Gazprom PJSC, Lukoil PJSC and Severstal PJSC.
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