Is IB's action subject to SEC or US Law?

Discussion in 'Forex Brokers' started by shylook, Aug 11, 2010.

  1. shylook


    Hello there,

    I met a serious issue in use of interactive broker. Unfortunately , I have forex margin and stocks without margin in same account of IB and do not take a look over my account very often. One day, i was very surprised with what happened in my account when I check it.

    IB closed my stocks positions without my authorization which make me huge loss in my account. Only, my forex position in margin was risk to IB, but my stocks without margin is safe. Actually, IB can close my forex position only to solve the cash balance issue. But, they clean my everything up.

    I'm sure that the IB's action absolutely did not care customer and protect us. But, i can not sure Is IB's action subject to SEC or US Law?

    I can not believe that there was not any firewall between forex and stocks in IB's system. They closed my stocks positions without my authorization. They made me a huge loss!!! These stocks are my asset for family. I am surprised with IB's action.

    Any input from you regarding that is really appreciated!
  2. cstfx


    It is all one account, not 2 different accounts.

    You have no case.
  3. you can select what positions you want liquidated first in Accounts.
  4. rwk


    When a broker liquidates positions, it is for their protection, not yours.
  5. shylook


    rwk, but I'd say they can just close the forex position to rule out any risk to them. are my stocks a risk to them? My forex position is only risk exposure for IB.
  6. Think about it, if there in the same account and you decide to trade fx on leverage your using your regular stocks as leverage. Depending on what order you told them to liquidate i would guess they would do the stocks first.
  7. sprstpd


    You need to research the ramifications of being on margin before you do it. The fact that you are surprised at what happened makes you look unprepared and ignorant.
  8. Have a professional accountant familiar with trading to take a look at your statements. I doubt it that IB could maintain your account by just closing the forex position. It appears that your FX losses were to high and they needed to liquidate your stock to cover it. But I cannot discount any possibility at this point. I have seen a lot during the years I am trading. Sometimes an account with a direct execution broker is allocated to a human desk where a very nervous young employee eager to make money will not hesitate to liquidate positions to claim a profit for his operation even if margin is covered. If the customer complains loud enough they may do something. I have seen forex brokers lock platforms so you could not place an order to get out and they will liquidate you during a market rally if you were caught in oposite direction.

    This should also teach you to always have a stop in place in forex.