I mentioned on the link of "Danger of IB: True or False?" that liquidation in my partner's account had just occurred of over 200 box spreads due to the auto-liquidate software. The total net loss seems was $11k. IB had encouraged to file a complaint to enable them to review it. Although some people have thought IB could be unreasonable, we will see here what they will do in this case, where seemingly the fault is quite clear. Other people are welcome to share their comments and concerns. Backround: Box spreads are hypothetically risk-free, and therefore do not require any margin. Yet, after opening the positions, my partner found out that IB had some type of restriction to not allow the Gross Position Value (GPV) to be exceed a certain size relative to net liquidation value. We had no idea that existing positions had to keep the right ratios in real time, otherwise there would be liquidation. After the liquidation occurred (which we believe was handled improperly by the auto-liquidate), someone in corporate IB pointed to somewhere in writing that mentions this can happen, while my partner's claim is that this information should have been shared by IB, because they were in constant communication, and IB was aware of the positions, and was aware my partner did not know of the liquidation concern. Stay tuned, here is one of the two sections of the complaint (with a few minor changes). Next week, I may provide the second half. REASONS THE MANNER OF LIQUIDATION WAS HANDLED IMPROPERLY: 1. Even when a broker has the right to protect himself by liquidating positions of a client, the broker is required to do it in a manner that will not unnecessarily damage the client. 2. Orderly liquidation would have reduced GPV by $100k, while the auto-liquidate reduced the positions by about $500k. The fact IB has software to handle liquidation of positions does not give IB more rights that a live broker handling the problem. A live broker would have liquidated two specific legs (totalling 100 options and 50 box spreads), while the auto-liquidate broke down 240 box spreads, and therefeore ultimately approximately 960 options. 3. The fact that $500k in GPV had to be liquidated to cover a cash shortage of $2k in the account indicates that auto-liquidation is not an effective method to handle GPV problems and does not replace a live broker--especially noting the results were marginal at best, because the system began again the next trading day. 4. The fact that a $2k cash shortage requires $100k in Gross Position Value ("GPV") to be liquidated (based upon 50:1 leverage), makes it doubly important for the broker to inform the client to give him the opportunity to wire in funds. 5. Since other or most brokers do not feel it risk to have this policy of limiting GPV, IB, who chose to apply this limit, should not also apply this limit in real time position value, and definitely not to auto-liquidate (and if to auto-liquidate, only if it were an effective means of handling the problem). 6. Although the purpose of the liquidation versus GPV limitation is to protect the broker, but the liquidations on February___ left loose legs and unhedged positions, which did not decrease, but increased the risk to both the client and broker. 7. Some of the options legs liquidated by the IB software did not decrease, but increased the problem of the ratio of net liquidation value versus GPV, by liquidating low priced out-of-the-money legs at market at below net liquidation value.