Has anyone else experienced the bug in IB's system which prevents a client from opening a second account? I have a Margin Account and I wanted to open an account which doesn't use margin, but to which I could transfer positions without having to incur capital gains/ (losses.) I had started opening another account some time ago. (I forget why.) It had never been funded but was still in their system. I don't know if that was the problem or not, but when I tried to open another account in early August, their system wouldn't let me. "Jason" acknowledged that there was a known bug in their system and that the issue had been referred to their programmers. I've checked back several times, most recently last Friday. Latest word is that they still have no update on the issue and that there is no work-around to the problem. I'm very surprised that this would go on uncorrected for so long. Either there is something VERY wrong with their system, such that it requires extensive repair, or the impact is so small, this isn't a very high priority item for them.
Not sure it is a "bug." I spoke to someone that had 2 accounts with IB. One Reg-T and one PM. They told him he was gaming the risk system, and froze his accounts. We have some accounts that have one account with us as their broker and one where we are not. The one with us, they use LVX.
I don't think there's a problem with that and I know you can have several IB accounts. I don't know if he was gaming their risk system in some other way. At other brokers, when they noticed I had two margin accounts (one was joint), they politely asked which one I would like margin removed from for their compliance reasons.
You can get around things like their 44 day hold on returning an ACH to a bank other than the one originating it with two accounts. You just take opposite sides of a short dated OTM option transactions in the two accounts, and eventually zero out the account you sent the ACH to and can do what you like from the "gains" in the other account. Of course you can almost as easily do the same with a second account at another broker, but if it takes a couple of tries it's less convenient to move the money back to try again, I guess would be their "logic"? It's basically the result of trying to eliminate humans from their risk department, it actually exposes them to more risk when anyone with a bit of creativity can figure out how to circumvent their algorithms.
I don't have the link handy, but I do know that IB had been fined several years back for allowing one of their customers to submit offsetting orders in multiple accounts. I'm assuming they have updated their software to prevent this. Of course, you can still probably get around it by doing it with an illiquid security in an account with another broker. It is probably violating some kind of regulation... but you probably would never be caught though... I had once thought of doing this -- generating realized losses in a taxable account, meanwhile, having offsetting orders to generate realized gains in a Roth/tax-free style account. Probably would work if you used thinly traded securities (especially probably stocks in very-late afterhours trading.) I never did it though -- I don't fancy going to jail or facing big fines...
Customer service said it was an issue that impacted other customers as well and said the issue was assigned to a programmer. My trouble ticket is still open. If they thought I was trying to game the system, I'd think they'd tell me so and close the ticket.
An update - I received a reply to my trouble ticket saying the issue had been resolved. I tried opening a new account - got the same message that there was a problem. Customer Service has again referred the issue to the programmers.