Some legal advice needed here on a serious securities issue with my brokerage firm. This is the story:
A couple weeks ago, I traded a stock several times that was going through a split. I trade several stocks a day too, so not always easy to keep track of them all. A week later, new shares of this stock show up in my account after the split, not exactly sure what had happened. I call my broker to have them look into it to see what is correct. After talking with a supervisor, and someone in the re-org department and looking over all my trades with them, I am told THEY ARE MY SHARES, AND I CAN SELL THEM. I then ask what happens if I sell them, and in the future someone realizes it’s a mistake, and I am now SHORT the stock? I was told NOTHING CAN HAPPEN. He said this is a RECORDED phone line, and I am telling you nothing can happen, they are YOUR shares. Ok, so I sell the shares at $2. It was 50k shares, stock did a 26:1 split.
Ok, 2 weeks later I see in my account they reversed the old split shares, and they claim I am SHORT 50k shares, and the stock now trading at $3, so theoretically I am down $50k at this point. I call the firm very upset and try to find out what is wrong. Mind you, this is 10 DAYS after I sold. I was told the shares were a mistake to start with, but since they confirmed they were correct, they are going to cover the shares in their own account so I wont be hurt financially. I am happy about this. Well, a day later (Friday), they call back and tell me that the clearing firm believes I SHOULD have known it was a mistake and not sold, so they are making me cover the shares at a HUGE loss. I said I wont cover anything until we work out WHO is responsible. Ok, an hour later I get a call back from the VP of operations who says to me they are gonna buy the shares back in their account to “MINIMIZE RISK” in case the stock runs up. Ok, I agree to this, I assume since they are buying in one of their accounts it will be ok. At 3:45 I see a trade for 50k shares at $3.45, .45 higher than where it was when we talked last. I get home at 4:30 and there is a message on my machine that the clearing firm says I am responsible, and the trade will be in my account today. I get to the computer and see they bought 50k shares at $3.45 in MY ACCOUNT, without telling me, and basically LYING to me about it. They told me it was getting bought in THEIR account, NOT mine!! This cost me $68,000! I am furious here, as I feel I was totally screwed and lied to by them, more than once. They claim I should have known it was wrong, I claim that was why I called to check on it, and THEY ARE THE PROFESSIONALS, and they confirmed it to me on a RECORDED LINE.
I plan on calling a lawyer on Monday about this, but I wanted some input here from others who may know about this kind of thing. They basically went into my account without my consent and cost me $68,000 in the process. The whole thing could have been solved if the clearing firm realized THEIR error a day after it happened, but they took 10 days to figure it out. What should I do, and what are my rights?
Thanks.
RG |
