TD Ameritrade = Fraud

Watch out for your account!!!!

I ran into this type of "error" before (with TD Ameritrade). Potentially, it could/would have been you!




Battling TD Ameritrade Quirks

By Perry H. Rod, Published: August 13th, 2009 12:24 PM EDT


UPDATE: TD Ameritrade has said it is now working to correct the issue discussed in this article and has promised a price correction on this particular order. They said that the complaint went to the wrong department due in part to the restructuring of the company related to the merger between Thinkorswim and TD Ameritrade.



As a seasoned investor, I have developed many habits. One of them has been sticking with my original retail broker, TD Ameritrade (TD Ameritrade Holding Corp: AMTD). I have put up with a lot of their system’s quirks and I am presenting a recent example for those who are shopping for professional online brokers:

*******

I was assigned 98,100 shares short of Citigroup from an option position I took on the previous day. In the morning I was asked to buy back the assigned short position by near the end of the business trading day because Ameritrade could not locate shares to borrow. No problem, I had done this successfully several times before.

That same morning, I put in an order to buy back 40,000 shares of Citigroup and it executed without any issue. I also called to discuss my margin requirements and to get a better understanding of what I could do after I closed out the rest of the short position, given my account value.

I found an ideal moment to take care of the rest of the short position and I put in an order at 1:55 19 seconds CST to buy 58,100 shares of Citigroup at the asking price of $3.06.

Wait, what? The order was rejected by the online system, with a message saying I did not have the necessary funds to place the trade.

Necessary funds?

This was an order to close my position, and I had even done the exact same order earlier in the day, so I thought it was a mistake. At 1:55 48 seconds I put in the order again. The trading ask price at this time was still $3.06. Again, I got the absurd message not accepting my order. I tried again with a slightly different amount (50,000 shares) at 1:56 34 seconds. Rejected again. While I was frantically trying to put in this order that was not being accepted, I called customer service. I later reached someone who put in the order at 2:04 16 seconds, about 9 minutes after my initial order. The ask and bid on the stock had moved away from me by the time the representative “pushed” the order through, which also took extra time. The order never filled and the stock ran.

30 minutes later, Ameritrade forced a buy of those 58,100 shares at $3.15, costing me $5,229 - the difference between the price Ameritrade bought back the shares versus the price I actually put in the order for.

TD Ameritrade failed me on the timing of my order in several ways: 1) the same type of order was accepted online without issue earlier in the day, 2) representatives told me to cover the position and never asked me to call in the order (why should they?), 3) the very fact that their system would EVER reject an order to close out a position is absurd and obviously needs to be fixed (they had some kind of bureaucratic excuse for this and did not even express a desire to fix the issue) 4) when I put in the order, the price matched the bid for plenty of time and should have been executed at that price.

I have spent countless hours over the years dealing with TD Ameritrade’s quirks and find customer service to be more and more difficult over time. I demanded $5,229, because TD Ameritrade was 100% responsible for the lack of execution of my order. That same month I had even spent well over $5,300 in commissions to them. What did they end up offering me after time-wasting conversations, letters and arguments? Some free trades worth much less than the original demand.

I have not properly done my homework when it comes to online brokers, out of habit. But it’s obvious to me and should be to any rational person that an online broker should never reject an order to close out a stock position. TD Ameritrade said their system does this and that and had an excuse for why this mistake happens within their system. But there is no excuse. An online broker should be a middle man between a person’s computer and the market maker, not a roadblock. Too many times for me, recently, TD Ameritrade has been a roadblock.

 

http://cheatedinvestor.com/


PDATE JANUARY 2013
THE EVIDENCE IS IN: THINKORSWIM altered TRANSACTION LOGS TO CONCEAL ITS WRONGDOING

Used Fraud to Avert Regulatory Sanctions and Win Arbitration

ar126112040388478(Miami, FL) A cheated investor here recently obtained copies of the transaction logs ThinkorSwim provided to FINRA and other regulators in response to the investor’s complaint of unauthorized trading, and he found that the reports had been deliberately altered to conceal the broker’s wrongdoing.

CheatedInvestor reviewed the documents and can confirm that the reports are missing pages corresponding to the dates that ThinkorSwim opened new, short VIX (Volatility index) option positions in the customer’s accounts, and that the page numbers added to the bottom of the report pages are not broken where the missing dates would have occurred.

“What puzzles me”, said the investor, “and what should send up a red flag for every regulator, shareholder and customer of this firm is why they would go through such great lengths, hiring two law firms, easily spending three to five times the amount of my claim, and engaging in deliberate fraudulent conduct in their attempts to conceal that they opened new, illegal short trade positions in my accounts. They must be hiding something much bigger, and I hope the SEC can find out what it is.”CDimage

“Although I was puzzled”, he added, “I’m not surprised that they would do something like this”, he added, “because in my arbitration ThinkorSwim provided an obviously edited telephone recording, and their witness lied under oath at least twice that I’ve been able to confirm so far.”

“Sadly, however, FINRA arbitrators are not required to act upon allegations of evidence tampering, lying under oath or violations of federal laws; FINRA arbitrators are motivated to rule in favor of the broker so they won’t be stricken from future arbitrator lists by brokers.”

“And FINRA as a regulator, whose acronym should stand for ‘Finra Is Not Regulating Anything‘, took eighteen months to investigate the matter. The investigation concluded that the broker did in fact violate the Rules, but instead of ordering the broker to provide restitution for wiping out my accounts and my future, FINRA issued a ‘cautionary action against the inappropriate nature of this activity.’ ” [see the actual letter below]

COMMENTARY

Folks, CheatedInvestor keeps hearing more and more of these stories about ThinkorSwim and its parent TDAmeritrade, and we’ve seen this trader’s evidence. There may be some serious wrongdoing going on at this broker, and so we urge you to approach with extreme caution and monitor your accounts very closely. Or consider getting your hard-earned money out of harm’s way before you become their next victim.

Here is the letter the investor received from FINRA (click on it to zoom):

 

http://stockmarketloss.wordpress.com/



Latest
Trader losses $120,000 due to TD Ameritrade Lagging Quotes !


UPDATE 06/01/2011 – I am still waiting to hear from TD Ameritrade . The Old COO has been fired and replaced with a new COO but nobody from TD Ameritrade has contacted me about their company policy to make me whole . Recently the SEC has reminded Broker Dealers that they will be heald responsible for tech glitches See Sec To Brokers – Execs On Hook For Operational Glitches/

UPDATE 11/18/2010 - The Compliance Department is refusing to do anything . JEFF PLUMMER and other TD AMERITRADE Employees are refusing to acknowledge their company policy . The Original article which was on wsj.com has been removed by somebody and other links to the article online are being removed . Basically, TD Ameritrade is supplying bad quotes and when you go to them with it they refer you to their client agreement but there are Fed Securities Laws that say that can do that . SEND THIS SITE to James Reilly- Managing Director, Chief Compliance Officer at TD Ameritrade.

Finra Rule -It shall be deemed inconsistent with Rules 2010, 2020 and 5210 for a member, for itself or for any other person, to publish or circulate or to cause to be published or circulated, by any means whatsoever, any quotation for any security without having reasonable cause to believe that such quotation is a bona fide quotation, is not fictitious and is not published or circulated or caused to be published or circulated for any fraudulent, deceptive or manipulative purpose.

See Other Sec laws here http://stockmarketloss.wordpress.com/td-ameritrade-and-sec-laws-and-finra-rules/

TD Ameritrade knowingly supplied me wrong quotes for months but TD AMERITRADE HAS REFUSED TO “MAKE ME WHOLE” BY HONORING THEIR POLICY. The people I communicated with at TD Ameritrade have refused to acknowledge this policy. Nobody seems to want to discuss this policy . I hope I can get some answers from TD Ameritrade . To see screen shots and the original letter I sent to them go here http://dearameritrade.wordpress.com/

If you know anybody at TD Ameritrade forward this blog to them ! I have been trying to reach the Chief Compliance Officer Lisa Henoch but no luck yet Thanks .

If you knew the quotes that your broker was supplying to you were wrong and that you would lose all your money would you make trading decisions based on those quotes ? The answer is NO only a fool would, but TD Ameritrade was providing quotes that they knew were wrong but did not alert or notify customers about this problem and when I brought it to their attention I was told that they were not obligated to notify customers because their client agreement says that they don’t guarantee their software . As a trader – Unless you have 2 quote feeds and you are comparing your TD Ameritrade quotes with quotes from another provider it is almost impossible for you to figure out that your quotes are WRONG so if your quote provider doesn’t tell you the quotes are bad you will keep trading until you are wiped out and that’s what happened to me .

My name is Uzoma and I had been a Client of TD Ameritrade for over 10 Years . I trade options for a living . In April 2010 my options Level 2 quotes broke and for over one month I unknowingly traded with the bad quotes . This caused me to lose $120,000. The level 2 quotes which are supposed to be real time were not real time and in fact lagged the real time by about 2 to 3 minutes . When I found out in May that my extensive loses were due to the faulty level 2 quotes . I contacted TD Ameritrade and asked them to make me whole as per their Company Policy. I first spoke to an Analyst – Tommie Richardson who told me that even though they were aware of the Streaming Quote issues TD Ameritrade doesn’t compensate anybody for losses . I asked her why they did not notify their clients about the problem since they were aware of the potential for loses and she said they were not required to notify anyone because they don’t guarantee their software just like their client agreement says .I tried to explain to her that what she was saying made no sense because they know that people will lose all their money by trading with the wrong quotes, but she stuck to her argument that they don’t guarantee their software will work all the time just like the client agreement says (See No 7 of Client Agreement) . I told her about their Company Policy that says they will make people whole for loses that are caused by technology issues and she said she had never heard of it . Why would anybody in their right senses trade with quotes that are wrong ? Anybody trading with inaccurate quotes is guaranteed to lose all their money .

I then worked my way up to Jeff Plummer (TD Ameritrade Compliance Manager) . I sent a letter to him explaining the lagging quote issue as well as my conversation with Tommie Richardson and he told me he would assign his Top Analyst to research the issue and get back to me in 15 business days . After 3 weeks I got A Letter in the mail telling me that even though TD Ameritrade was aware of the lagging Level 2 Quote problems NO COMPENSATION WOULD BE FORTH COMING . He purposely ignored the reference I made to their company policy and told me that I signed the client agreement . To confirm Tommie Richardsons argument that TD Ameritrade did not have to notify clients or even fix the Lagging Quotes Problem – my level 2 quotes stayed broken from the day I notified TD Ameritrade in May till the day they Forcibly Terminated my account in September . Nobody contacted me about fixing the problem and after 4 months when I sent the Compliance Manager Jeff Plummer an email asking him why the level 2 problem had not been fixed after 4 months, 2 days later I got a letter from Lynda Krueger Hoffman saying that TD Ameritrade had terminated my account . I guess so that I won’t be able to keep asking them why they had not fixed the problem . I WOULD LIKE TO GET SOME ANSWERS FROM TD AMERITRADE EXECUTIVES about what exactly their policy is. – Send this blog to any contacts you know at TD AMERITRADE if you would like to get answers too .

Something is wrong here . Somebody is either lying or doesn’t know their own policy . COO Dave Kelly says that TD Ameritrade has to take some responsibility for these tech issues but yet the analysts are saying something else .Tommie Richardson of TD Ameritrade admits that their software has problems that they know about but they are letting people keep trading with the bad quotes only to say that their client agreement covers them from doing anything about it . Tommie Richardson did not make a mistake when she said that they did not have to do anything about it because when a message was sent to TD Ameritrade telling them about the wrong quotes and asking why clients were still allowed to trade with this bad data, another Analyst – Daniel Pilmaier, Senior Research Analyst, Office of the President said that even though the problem was identified as an issue originating from their quote provider “We would not intentionally deter clients from trading by removing the capability to” WTF ???? So, basically they are just sitting in their offices watching people lose money and when people realize what is going on their (TD Ameritrade’s) defense is that the client signed the client agreement . People open accounts with broker dealers to make money NOT to lose money ! If I did not find out about these quote problems by myself I would have borrowed money to wire into my account and lost it all too. What about someone that opens a new account and doesn’t know the quotes are bad ?

TD Ameritrades actions speak louder than words . When I contacted the compliance manager Jeff Plummer, I expected him to tell me that Tommie Richardson’s response to me was wrong but after 3 weeks of him assigning his best analyst to research the case he basically sided with her by saying that they were aware of the problem and would not give me any money .

Lagging level 2 option quotes that are wrong every single minute of everyday for 4 months ARE 100% Unacceptable ESPECIALLY when TD Ameritrade knows about the problem but insists that their Client Agreement is an excuse for them not to do ANYTHING. Basically somebody is sitting in their office watching people lose all their money and they don’t see anything wrong with it . People wire

 

http://www.level2stockquotes.com/market-makers-w-list.html

WATH is Market Maker name for TD Ameritrade. should that be conflict of interest inherently? I noticed their manipulation of price quotes almost everyday.




WATH | M | TD Ameritrade, Inc. | | 212-806-3500 | Y | Y | N | N
WATH | M | TD Ameritrade, Inc. | ORDER ROOM | 212-428-8618 | Y | Y | N | N
WATH | M | TD Ameritrade, Inc. | TRADE/TECH ISSUES | 800-598-5090 | Y | Y | N | N
WATH | M | TD Ameritrade, Inc. | 24/7 TECH SUPPORT | 201-521-2970 | Y | Y | N | N

 

I used to trade equities with DATEK... when they got bought out by AMTD, I moved my funds to IB closed that account.... eventually I opened an IRA with ToS... after they sold to AMTD, I transfer all my funds to IBKR and left $300 behind because i needed the ToS marketdata for an app that tied into it...

basically, it should tell you something that AMTD keeps buying companies to grow market share and yet they end up not being able to retain a good percentage of their clients...

find a new broker... there are better ones out there for the active investors...

 

TDAmeriturd is a marketing firm. Not a professional brokerage.

 

How does a 10 year veteran trade an account for 1 month and not notice his quotes are a few minutes behind?

 

the guy had been with TD for 10 years, so I guess he'd get into habit of trusting the data quality. you and I would too.

ofthomas - a possible workaround is never let one's account balance to go over 100K. withdraw money and move it to another broker whenever the balance reaches to 100K. this way one's account won't be on his broker's radar for "special treatment" or potential abuse

 

It takes all of 1 trade where you get an unexpected fill or unexpected loss to see something is wrong ... not 1 month and 120k in losses. Just another sore loser (not saying that TDA doesn't have serious problems ...)

 

TD Ameritrade knew the quotes were lagging . On The Streamer but on the TOS platform they were right . So, they left it like that because they were making money from the setup . Basically if you had both platforms up you could have gamed the system by seeing the correct quotes on TOS and then trading on the Ameritrade platform .


There is no way to know that your quotes are not accurate unless you have 2 platforms up ..

You can't make money if you are using stale quotes . It is against the law to publish fraudulent quotes . Its is called manipulation of quotes .