It seems that IB is telling customers to get a security device for login or sign a form that IB is not responsible for any financial discrepancies in the account. Else they are not allowed to access their account. Is this legal?
Yes. Why do you think that a firm with lawyers on retainer would not know the legality of their actions, especially with the public, than an unknown trader without any legal training. (I pressume as much, because if you did have legal training, you would not be asking such a question. You would already know the answer to it. Plus, you would also know that IB is not obligated to extend services to ANYONE. They provide a service and you, the customer choose whether or not to pay for this service. If you don't like the way IB operates their business, go to the next broker.) This topic about security devices for trading accounts has been discussed ad nauseum not just here but all over the web.
You answered âYesâ Then you said âan unknown trader without any legal training who has nothing better than hang around chat rooms and post when he has nothing to sayâ (appreciate the modesty referring to yourself) would not know the answer, So which one is it?
No, it is not legal. But then they propably dont's say "not responsible for any financial discrepancies" ... Just get the card.
Let's put this another way. IB is providing a very strong protective measure to prevent someone from hacking into your account. There are very sophisticated pump and dump syndicates attempting to hack into brokerage accounts. IB is attempting to put a strong lock on the door which should prevent such an attack on your account - even if you username and password are compromised.. Should a client decide not to utilize the lock, do you really think the brokerage should be liable? http://www.washingtonpost.com/wp-dyn/content/article/2007/01/25/AR2007012501763.html
Why the hell would you even ask? Just get the security device. IB does what it wants and you're goddamn straight they know their legal position.
IB could just force all customers to get the security device. They are not because they know a large number of customers would not want this approach. IB seems to just be using this as an excuse to try to cover itself.. which does not look completely right Broker should be liable or not based on what the law says. If the law say they are not liable then they are not. There is no need to use this as a tool to corner customers for a signature. Other brokers including the one mentioned in your Washington Post article offer and inform the customers about the security token cards, but IB seems to be the first I know of with this particular approach
Def, I opted out the token logon because I use the API to trade and find it very annoying to need to manually logon every morning. Is it possible that IB provide an option to only allow access from a registered computer? I know tradestation does that and it seems a good idea. I don't want the trouble of a hardware token device but I am also worried some hackers being able to hack my username and password. A registered machine approach seems to be a relatively simple and secure measure.