WikiFX report: Etoro Apologizes After Liquidating Its Clients' Russian Stocks

Etoro is in trouble.

The Israeli online trading platform has been going through a crisis of confidence with its customers for the past few days after it made a decision that had a significant impact on many stock portfolios.

Etoro clients who invested in Russian shares received a message from the platform from Thursday explaining that their shares had been liquidated without their notice.

The customers most affected are those who owned shares in Russian supermarket operator Magnit, whose shares were liquidated for 1 cent a share. The company was still worth billions of dollars before the invasion of Ukraine by Russia.

Faced with this unpleasant surprise, many affected customers stormed social media and messaging platforms like Telegram to express their anger.

“@etoro have just decided to forcefully close clients non-leverage positions in some Russian stocks,” one user posted on Twitter. “This has to be considered theft.”

“Meanwhile on @eToro Russian stocks are not a good idea to buy now,” another user wrote.

eToro Calls it a 'Goodwill Gesture'

The Russian war in Ukraine provoked the announcement of economic and financial sanctions by the United States, the European Union and their allies against Russia, President Vladimir Putin and those close to him.

Faced with a potential financial disaster represented by these sanctions, the Central Bank of Russia closed the local Stock Exchange last week. The exchanges on shares of Russian companies were suspended at the London Stock Exchange. Magnit, one of the companies affected by eToro's decision, is not one of the entities sanctioned by NATO and its allies.

But eToro explains that we are currently going through exceptional times, which justifies its action.