Sue online broker for negligence

Discussion in 'Retail Brokers' started by jjtrader, Aug 18, 2011.

  1. jjtrader


    On August 5 when stocks were dropping big, this broker started to transfer my account to a different clearing firm. on Aug 4th I called to check the transfer status, they told me the transfer won't happen until a week later, and they said that during the transfer process I will have access to my account as usual and there will be no service interruption.

    However, when the market opened I found that I still had no access to the new account. For the first 45 minutes of market open on Aug 5th I was totally blocked out of my online trading account, and I had no access to any of my existing position and I couldn't open any trade for the time window when I need access the most and the market was nose diving huge.

    I did call the broker, and they admitted there is a problem in the transfer process, and the new positions were not properly set up in the new account. It took them 45 mintues to manually add the positions by hand one by one. Even after this was done, some positions were still not correctly transferred. During this period the market dropped big and the VIX surged and I couldn't do anything to cut my loss.

    Even after the access was restored my positions were not properly transferred to the new clearing firm account and many position data were wrong.
    Since I didn't have access to the correct report data, it greatly impacted my ability to make trading decisions. That made it impractical to even place a phone order with them. I have the proof of email communications on that morning, and I saved all account history data.

    As a result I had huge loss in my options margin account because of their mishandling.

    In my opinion I have a case of broker's negligence in mis-handling my account transfer in timely and properly manner which resulted in my big loss.

    Do you think I have a case for legal actions against this broker? What's my odds of winning?

    Or, should I approach the broker directly for loss recovery?

    I found a securities laywer with high rating, but not sure if I can trust them.

    Can anyone recommend a good lawyer in this area? How do they typically charge?

    Thanks and best regards,
  2. When my account from ThinkOrSwim was transferred to TD Ameritrade, there were all sorts of mistakes including trades that were not even made by me. It was a mess. And TD Ameritrade never updated my account to the correct balance. Feels like robbery. Should I hire a lawyer or go to small claims? Would it depend on the amount of money involved? Thanks.
  3. jayre


  4. You really can't sue ... You have to go to arbitration
  5. jjtrader


    Why only arbitration?
    It's the transferring broker I have problem with, not the receiving one.
    I can prove loss around $50k to $100k because of the broker's negligence.
  6. Arbitration because when you open an account will all brokers they make you sign an agreement not to sue but resolve issues through arbitration only . All you have to do is google the name of the broker and arbitration and see what comes up .
  7. you're screwed


    because you signed all those documents when you opened your account that it's NEVER their loss.
  8. yes u will have to go to arbitraction, every broker has u sign an arb agreement. easy to do then trying to sue for sure.
  9. +1 to everyone who said you're screwed. for some value added advice for everyone else for the future, if you know that your current broker is changing clearing firms or doing anything that could effect your ability to trade i suggest you go to cash so what happened to the op doesn't happen to you. is this inconvenient? yes. but it's hopefully a one time occurrence. better safe than sorry.
    #10     Aug 23, 2011