Dear Traders, The following message was received by a trader associate of mine. Here are some facts. The account itself has been established for 5 years, capitalized at roughly $100k. Recently, in September, the trader established an alternate login for a trader who is located outside the U.S. There was no indication of a problem, and no warnings that a problem may exist until the following letter arrived. I have anonymized the letter but otherwise left it exactly as is. My question: Why, and what can this individual do to retain his account? He has offered to remove this additional trader, if that is indeed the issue, but IB will not say what the issue is. That's what I know at this point. ----- Original Message ----- From: newaccounts@interactivebrokers.com To: moneyxxxx@gmail.com Sent: Tuesday, November 25, 2008 9:45 AM Subject: Your Interactive Brokers Account: UXXX311 Dear XXXXXXXX, RE: IB Account UXXX311 Based on information received by the IB Compliance Department, we have determined to terminate our relationship with you. Accordingly, you are advised to close the account referenced above by 25 DECEMBER, 2008. You may transfer your accounts to another brokerage firm through the Automatic Customer Account Transfer System (ACATS), or you may liquidate any existing positions in your accounts and we will disburse any remaining funds to you. Consistent with the foregoing, your accounts have been placed in liquidation-only trading status, meaning that you may close out existing positions but you may not establish new positions. If you choose to transfer your account to another broker, you will need to contact this receiving broker and make the proper transfer arrangements. If you choose to close your account, please log into your account via LOGIN/Account Management Menu and follow the procedure below: Check Positions: Review your Trader Workstation within LOGIN/Trade or check daily account statements within the Statements feature under Report Management to verify that all positions have been liquidated or transferred to an alternative broker via the ACATS system. Convert: Any foreign currency you may hold must be converted to your accounts base currency. This conversion can be processed using the IDEAL/Forex system from the Trader Workstation. If you need assistance with the conversion process please contact our Trade Department at 1-877-442-2757. Verify Mailing Address: For USD based accounts, IB will issue a check within 3 to 10 days of the closure request to the mailing address shown on our records. Please check your information to confirm that IB has your correct mailing address within the Info Change feature located under Account Administration. Verify Bank Wire Instructions: For all non USD based accounts IB will issue you a wire within 3 business days to the Banking Standing Instructions on file. Should you wish to create or change banking standing instructions, go to the Withdrawals feature located under Funds Management. Under Wire Transfer choose Create Instructions to create banking standing instructions or Edit Instructions to modify existing banking standing instructions. Close Account: Select the Close Account feature under Account Administration and complete the form for processing. Please note that if the above criteria are not met, our system will not be able to process your closure request. Sincerely, Interactive Brokers Compliance Department New Accounts Department Interactive Brokers, LLC-US
BD`s can fire you whenever they want. All they need is a tickle that something isnt right...true or not. ACAT out and move on....you will be fighting a losing battle.
Obviouoly that pissed off someone at IB. Maybe the out of country party was "Osama" or this practice is strictly Verboten.
(My "guess" only). Sounds like a anti-money laundering event was triggered by their Compliance people because of the off shore second account. FWIW, Don
I Know IB is very Strick in all these thing i am in the US and i am trading from the US and my fund are coming for a US bank account. They wanted me to sign a paper saying that i am the only one who is going to be trading this account. And neither am i from Middle east
Chat Transcript Between IB(xxx) and NA Started at: Wed, 26 Nov 2008 16:18:57 UTC ChatSys: This chat is associated with ticket #xxx367. Please record this number for use in future inquiries. You are currently in room 'General '. IB: Hello, this is IB. How may I help you? : Yes, how do I talk to someone in upper mangement? : Anyone there? IB: Is this regarding the closing of your account? : Yes Karen S: You can send an email to newaccounts@interactivebrokers.com : Hello? : That does not work. They will not talk to me. : I want to speak with someone in upper mangement. IB: That is the only way to contact the compliance department. : I don't want to talk to them, I want to speak to mangement. Karen S: It is the compliance department that is handling the matter. : Then they should be will to speak to me, that is only fair. ChatSys: The communication channel has been successfully restored. You can continue communicating with the CSR. IB: I have checked and it is a management decision to close the account : I have a right to know what I not complying with. Why is all I want to know. : Why is all I want to know. IB: I am sorry but that information is not available, all you will be told is "Based on information received by the IB Compliance Department, we have determined to terminate our relationship with you." : I have a legal right to be told that information. Karen S: IB only needs to provide this information. Based on information received by the IB Compliance Department, we have determined to terminate our relationship with you. They will not back off. <Trader>
I look at this from the perspective of an IB shareholder (which I am not). Shareholders will want IB to err on the side of caution. Even the smell of impropriety can wreak havoc in the current environment. And just think about it: IB is open to the accusation that, because it has this online, sight-unseen account sign-up system available to people all over the world, it is a potential easy tool for money laundering. So, I'd bet IB doesn't know that anything untoward has taken place. You've simply, as Don said, dinged a couple of their red flags simultaneously. So they rightfully terminated their business with you, fully aware that, odds are, there is nothing illegal going on. Reputation is priceless, and not easily restored once lost. I give IB credit, and that is no slight to the OP.