followup on irregularities in Penson account
*This is a long post, but I feel important to traders
who use Cyber. As I know Mr. Strkyer is aware of this
problem, and reads this forum, perhaps he can provide us
all with exactly where we stand*
On Jan 25, post 116, I noted that I had found what are
termed 'straddles' in my account at Penson. A straddle
occurs when you are shown to be both short and long the
same security in the same account. In fact, in one
instance I was shown short, long and cash in MFNX. This
results in a) incorrect margin charges, b) incorrect
calculation of overnite (reg T) buying power. Note that
intraday buying power is not affected.
This problem is not specific to my account only - it has
more than likely happened to other Cyber clients who take
short positions. It is impossible to quantify the amounts
of excess margin collected as it is dependent on the number
of occurances, as well as your typical share size. Note
that any excess margin charges most likely are held by
Cybercorp, not Penson.
I reported all of this to Cyber on Jan 20, verbally, and
in writing on Jan 25 to Mr. Meldahl. In that letter I
formally asked for a reconciliation/verification of the
margin charges made to my account and in addition, to make
sure they agree with what is reported to the IRS.
I have spoken twice with W. Bunting, who seems to be directly responsible
for clearing up this situation, most recently a few days before the online trading expo. I
also had occasion to speak with Mr. Stryker on the phone
about this where he assured me (and I paraphrase) 'this is
an important item and will be addressed'.
In my last call with Mr. Bunting, I was told that this
was taking longer than expected because Penson has another
company do these calculations (Sunguard), and that 'the
data is on mag tape and will take two to four weeks to
retrieve and verify'.
That was just about three weeks ago. We are now starting
the second week of March and this issue is still outstanding.
I find it hard to belive that if Cybercorp
is such a high volume account (read: good account) that
Penson would not be able to have this matter resolved by
now. Note that we can all download our transaction data
directly from the Penson website, certainly they have
the same ability? What is missing is the exact broker loan
rates that were charged on each day, and only Penson/Cyber
have this information.
While at the online expo, I spoke with a Penson rep. He
was unaware of my specific issue (not surprising) but was
aware that these kinds of issues have come up before. He
passed it off as miscoded tickets, ie they receive a ticket
marked to close a short position before they receive the
actual ticket *opening* the short position. Hence a
straddle is created instead of a closed position.
And this is where it sits. Am I (we) owed back margin
interest? Will incorrect amounts be reported to the IRS?
Well I am not 100% sure, but I am 90% sure that will be
the case. I for one have no desire to have to file amended
tax forms or start explaining why Penson has reported
wrong numbers.
----------
copy of post 116
followup: Note to Short Sellers at Cybercorp
Using the Penson web site, looking at the daily Equity
statement, I have found errors on 4 days in May, 3 days
in Aug., 5 days in Dec, and now 2 in Jan of 2000.
I have reported the other dates to Cybercorp, and have
recvd verbal word that I am due back funds for the original
problem from December.
While the problems appear to originate at Penson, we are
in fact clients of Cybercorp. As such, I now really have
to question all margin charges made in the past year. In
addition, this effects what is reported to the IRS. The
last thing I want to have to explain would be overstating
my margin costs - even if its an error by my broker. |
