After thinking about it, without any input from etrade to explain what happened, here is my guess. Normally a redemption is 100% and they give a date in the future. Then trades are halted for a few days until things are sorted out and they add a .CL to the stock symbol. But in CDR's 9-11 press release, they give no redemption date but say that documents are going out immediately. ??? see below.
Press after the close on sept 11: "The notice of redemption and related materials will be mailed to the registered holders of Series A Preferred Stock on or about September 11, 2012."
Even though I sold on 9-11, I am still the register owner until settlement. I would have thought that if the redemption was "immediate," that they really could not do it for 3 days, and that they would at least have to notify Etrade/SEC (or whoever) and trades would be halted for a few days to allow settlements of trades already made. I don't know.
Etrade reversed the trades in my IRAs for the % being redeemed (i.e. bought shares back at exactly the same price as I sold them earlier). And those accounts have negative cash balances now. They are not margin accounts. They did this because they said that they could not force us to buy shares in an IRA that had no funds. And in taxable accounts they bought back shares at the market and the cash balances are lower in those accounts as well. It looks like shares will stay in the accounts until redemption date, whenever that is. They said they will reimburse all margin charges, price changes to re-buy, and any fees. So I think we have free funds in the IRAs until redemption. Thanks.
Also strangely... Etrade said their margin dept would re-buy the shares but they would rather that we authorized it in each account. I asked "why? what's the difference?" They said the margin dept charges $45 when they do it. I said "who cares? you are going to reimburse me anyway?" TMI... but they still wanted to make the trades before the margin dept got involved.
If this guess is true, then it is not etrade's fault. CDR may have slipped a problem in under the radar. But no one will tell me the cause of the mess. The account rep at etrade told me that he's never seen anything like this happen before. |
