I'm a victim of serious online fraud at brokerage

Discussion in 'Retail Brokers' started by jck_2378, May 28, 2006.

  1. jck_2378


    Could someone help me and let me know how to deal with online fraud case. Someone depleted my online brokerage account at TD Waterhouse Canada recently and so far TD Waterhouse Canada has not refunded my loss yet. I don't know whether they will. I really need help, I can't sleep, I lost a large sum of money and nobody except me seems to care.

    My online brokerage account at TD Waterhouse Canada was attacked and hacked on April 13, 2006. Between 12pm and 3pm the intruder, using my money, bought approximately CAN$150,000 of the shares of netwolves corporation(WOLV on Nasdaq). The share of the company was traded at $0.35 to $0.49 that day and the market capital of the company was under 10 million dollars. The volume of trading that day was abnormal, almost 12 times of its average daily volume, this happened without any press releases or news from the company. In addition, at that time the company already received a notification from Nasdaq of delisting. In fact a month later, it was delisted from Nasdaq and is now being traded as WOLV.PK over the counter.

    The intruder bought the stock in 19 transactions (some as large as $20,000 and some as small as $44 dollars) within 3 hours. TD Security system did not catch it and all transactions went through. Becasue of the suspiciously large trading volume (approximately 6 million shares) between 12pm and 3pm on that day, it seems very possible that the intruder gained unauthorized access to multiple online trading accounts and used the money of the victims to manipulate the stock price and profited from it. I may not be the only victim. I asked TD Waterhouse Canada whether I'm the only victim in TD Waterhouse Canada, they told me that their Client Support Group is not immediately aware of anybody else beside me.

    While using my account to buy stock, the intruder also sold two of my mutual funds. Durng my first two telephone conversations with TD representives while reporting the case, they told me that the mutual funds were sold by telephone and the stock was bought through web. When I called in later, they corrected themselves and said the mutual funds were also sold through the web. I found this inconsistency very strange. But TD waterhouse are not willing to share its investigation data with me.

    Also at the time of the attack, I had a cash brokerage account with approximately $80,000 of equity (almost all mutual funds) and zero cash balance. TD waterhouse allowed the intruder to overdraft my cash account to an amount of negative $150,000, all used to buy WOLV stock. My cash balance after this fraud then showed negative -$150,000, is this normal for a cash account? I did not have margin account, why is this allowed considering the risk involved with the stock (almost like junk stock) ? I feel that its cash brokerage account is more dangerous than its marginal account.

    Also I don't understand, given that the purchase was made in 19 transactions, why was this fraud not catched earlier and stopped by TD Waterhouse to avoid loss, what could be the explaination?

    On the morning of April 14 (within 18 hours of the attack), I discovered the fraud and contacted TD Waterhouse Canada immediately and was told to wait until next business day since they could not investigate because no one was available to investigate during the long holiday weekend.

    On the next business day which was April 17, I contacted TD and we decided first to sell all shares of the fraudulent transaction to minimize the loss. The loss from the fraud: approximately US$37,000.

    Since then I have contacted TD Waterhouse Canada many times and TD has been doing its own investigation. It took them 3 weeks to do an internal investigation which they concluded that their system was not compromised and they want to investigate my computer. I said OK two weeks ago and they haven't showed up yet.

    Six weeks have gone since the attack and I am wondering what TD Waterhouse is doing and why the process is so slow? TD Waterhouse refused to tell me anything about its investigation, but told me that they have not contacted any external agencies regarding the issue since they believe that it was not their system that was compromised.

    I have so far contacted SEC, FBI and RCMP. I feel helpless right now. I also contacted my local police and they said they have to wait for TD's investigation to finish and they may do something after 6 months.

    Please let me know your view on my case and what should I do to resolve this issue and get my money back. I really need help.

    Thanks in advance.
  2. jeez, dunno whatta say...very ugly stuff am sorry happened to ya...i think wisest thing given the amount of cash wud be to hire an attorney.

    best of luck and keep us informed.
  3. It sounds very odd. I would think it’s a SEC or NASD issue. They have to find out if there was any major seller that day. They need to investigate that person to find out the real answers. Do you have a router on your computer with firewall software? It’s very odd and I don’t understand how a broker can be at fault for that. Now on the same note brokers lie to protect there own ass but if they were victims at a few different brokers I think your money might be gone.
  4. galiano


    Im not an attorney, but by initiating the sell transaction BEFORE official fraud investigation was underway, I believe puts you in a place of responsibility.

    Just the way I see it, sorry (but what the hell do I know)

    Please keep us posted.
  5. plugger


    jck, prior to this incident, did you ever own WOLV stock in your account?

    how did the 'intruder' gain access? Was it remote or from your terminal?

    do you speculate in penny stocks?

    There's always two sides to every story. Let's hear the other side.

    So far it reads, "i was sitting there praying, and then this real bad thing happened.........."
  6. no way...not in a million years...he did the right thing to control the damage...in case the investigation doesnt rule in u favor what ya gonna do?
  7. jck_2378


    I had no choice, the stock price is going down fast. If I didn't sell it, my loss would be doubled right now.
  8. plugger


    Since you're here now, how about these questions?
  9. jck_2378


    I had never owned or heard of WOLV stock prior to this incident. The intruder gained access remotely, not from my computer since I was at work during the time the incident happened and my computer was shot down.
    I only trade mutual funds and large corporation stock. Never speculate in penny stocks.
  10. nkhoi

    nkhoi Moderator

    find out who is the big seller at the same time, maybe he can give you some clue
    #10     May 28, 2006