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

Contact Me If  You Have Any Questions

 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 money into Ameritrade to MAKE MONEY and not LOSE MONEY . Why would anybody use Ameritrade if they know that when there is a problem Ameritrade will sit by and watch them go bankrupt only to tell the client that they signed the Client Agreement .

This makes no sense because there are SEC Laws that govern  the way Broker Dealers operate . Broker dealers can’t just provide wrong quotes to customers so that customers can keep trading and making them commissions while they the customers keep losing money . Why would anyone try to make money trading with bad quotes and why would any broker knowingly let people trade with bad quotes ?

Chief Operating Officer Dave Kelly (an executive who has over 20 years experience) had an interview with Dow Jones and talked about the company policy that says that  they will make clients whole for loses they sustained due to the tech issues . Dave Kelly knows his Company Policy very well and he knows his Company’s technology very well but I can’t seem to get anybody else at the company to even discuss this policy . Dave Kelly talked about taking responsibility for the tech issues and he talked about compensating the clients affected by the tech issues . He could have just said that the clients have signed a CLIENT AGREEMENT but he did not say that because he knows that he is bound by SEC Laws . These tech issues are well known to TD Ameritrade . I have sent several letters to Jeff Plummer (TD Ameritrade Compliance Manager) and he has REFUSED to apply this company policy to me . In fact he has not acknowledged the policy, and in his responses to me he has deliberately avoided mentioning this policy.

As a matter of fact – When I realized that Jeff Plummer and Tommie Richardson had avoided acknowledging their company policy, I sent a complaint to the SEC and FINRA with the link to the WSJ (Wallstreet Journal) article that had the interview which DAVE KELLY gave Dow Jones but I was shocked when the link to the article on the WSJ vanished . The article with the interview was gone but fortunately I had made lots of screen shots plus some other sites like Fox Business had also carried the the article . You can draw your own conclusion about what you think happened .

If you know anybody at TD Ameritrade forward this blog to them so that this issue can be clarified  . I would like my $120,000 back per their policy . Thank You !

TD AMERITRADE’S POLICY - This policy has been in existence for many many years and COO David Kelly repeated it in June 2010 during an interview .

In an interview with Dow Jones Newswires Wednesday, Kelley, who is also head of technology for TD Ameritrade, said the company “has to take some responsibility” for website, server, and streaming-quote issues that affected brokerage clients on three separate days over the past three weeks.

“I don’t want to push [these problems] off on other people…these events almost never happen, but in the end it’s our problem.”

Kelley said the Omaha, Neb., company’s policy is to “make clients whole for whatever inconvenience they encountered” on days when they experienced a service disruption.

Ameritrade has offered to compensate some investors financially for monetary losses during the technology issues, while offering others free trades on a “case-by-case” basis.

IS THIS A NEW POLICY  ?  NO !  

TD Ameritrade has reimbursed many of their clients over the years here are some examples below . I do not know why Jeff Plummer Compliance Manager at TD Ameritrade is playing games . What kind of Compliance Manager pretends that a COMPANY POLICY does not exist ? I have sent Jeff Plummer several letters referencing this policy but till today no response discussing this company policy . I have also sent 4 letters to LISA HENOCH - CHIEF COMPLIANCE OFFICER  of TD AMERITRADE complaining about Jeff Plummers conduct and asking her to look into this case but I am still waiting for a reply from her .

• In May 2010 TD Ameritrade Clients locked out for 80 Minutes “We are also working with clients impacted by the issue individually to make sure that they are treated appropriately,” spokeswoman Kim Hillyer said.

• In October 2006 during an Earnings Conference Call CFO Bill Gerber said As you can see, expenses before advertising were $255 million for the quarter. The primary difference was in other expense, which was $8 million higher, predominantly as a result of a stock split where we received inaccurate information from a third party, which ultimately resulted in our clients being short shares of the company that split. As an accommodation to those clients who acted on this information, we made them whole, costing us $6 million.

• According to A 1999 Sec filling by Ameritrade – See Page 13 In September 1998, we became subject to a putative class action lawsuit resulting from systems failures and delays. In addition,from time to time, we reimburse our customers for losses incurred in connection with systems failures and delays. During the quarter ended December 31, 1998, we paid $3.1 million to customers for execution price adjustments as a result of systems failures and delays.

SECURITY & EXCHANGE COMMISSION/FINRA - I have listed a few duties rules and laws below. There is no way a broker dealer  is allowed to supply bad quotes especially when it is a known issue . Jeff Plummer, Tommie Richardson and Daniel Pilmaier who are all registered brokers should know the SEC rules and laws as part of their jobs .

• The obligation to maintain operational capability is not new. The securities laws have always required firms to handle customer transactions properly, whether manually or electronically. It is a violation of the antifraud provisions of the securities laws for a broker-dealer to accept orders without having sufficient personnel and facilities to properly execute securities transactions. See, Securities Exchange Act Release No. 8363 (July 29, 1968), 33 FR 11150.Click here to read on SEC’s website

 

• Firms should also use every reasonable effort to notify customers of operational difficulties. In addition, to assist in monitoring and planning for systems disruptions, firms should consider maintaining records of capacity evaluations and system slowdowns and outages, including details on the cause and impact of the problem. Click here to read on SEC’s website

• The “antifraud” provisions prohibit misstatements or misleading omissions of material facts, and fraudulent or manipulative acts and practices, in connection with the purchase or sale of securities. Broker-dealers owe their customers a duty of fair dealing. This fundamental duty derives from the Act’s antifraud provisions mentioned above. Under the so-called “shingle” theory, by virtue of engaging in the brokerage profession (e.g., hanging out the broker-dealer’s business sign, or “shingle”), a broker-dealer represents to its customers that it will deal fairly with them, consistent with the standards of the profession. Based on this important representation, the SEC, through interpretive statements and enforcement actions, and the courts, through case law, have set forth over time certain duties for broker-dealers. These include the duties to execute orders promptly, disclose certain material information (i.e., information the customer would consider important as an investor), charge prices reasonably related to the prevailing market, and fully disclose any conflict of interest. Click here to read on SEC’s Site

• Duty of Best Execution – Broker Dealers have a duty of Best Execution . A Broker Dealer cannot honor their duty of Best Execution if the quotes being displayed on your screen are wrong . A traders order will never get filled at the best bid or ask price because they are looking at the wrong quotes Click here to read about the duty of Best Execution on FINRA website ………….   S.E.C. Rule 15c1-2 prohibits “any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.” Under the commission’s view, the best execution duty derives from common law agency principles that require an agent to put the principal’s interests ahead of its own, so a violation of that obligation operates as a fraud.

• Section 29(b) of the Securities Exchange Act permits a party to a contract to seek its rescission if performance of the contract “involves the violation of or the continuance of any relationship or practice in violation of,” any provision of the Securities Exchange Act of 1934. Federal law – 15 USC §78cc(a) (“Any condition, stipulation, or provision binding any person to waive compliance with any provision of this chapter or of any rule or regulation thereunder, or of any rule of an exchange required thereby shall be void.”)

• FINRA Prohibited Conduct: Failing to use reasonable diligence to see that a customer’s order is executed at the best possible price, given prevailing market conditions. Read on FINRA Site

• FINRA Rules of Fair Practice impose the following standard upon brokers: “A member, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade. ” This standard, along with other FINRA rules, is legally enforceable and is the standard on which investors are supposed to depend.

THE SERVICE DISRUPTION

Trading is a risky business . Trading Options is even riskier . Trading options with Delayed level 2 Quotes is Suicide . An active trader can not  make money with lagging real-time quotes . I don’t know if I need to elaborate or explain how you can lose money but here is one way – lets say you want to get out of a position and you are trying to sell into the Bid of $2.00, your level 2 quotes show you a $2 bid so you sell at $2 but nothing happens so you wait and wait and wait , meanwhile the real time price is $1.75 . By the time your screen shows you $1.75 and you change your order, the real price may be $1.40 and so u keep chasing the option down not knowing why your order is not getting filled . You may also buy an option for $.80 when the real price is $.60 so that you lose almost 30% as soon as you buy . This is why a lot of times clients orders don’t get filled even though they believe that they may have tried to buy or sell at the bid and they may see the price on their screen going below their bid and nothing happens . The order probably did not go through because the bid/ask quote they used to put in their order is not the REAL TIME Quote. 

I started noticing problems with Command Center on April 16 2010 this was a Friday and it was options expiration . It was also the day that  Goldman Sachs was charged with Fraud by the SEC . The market was dropping but some of my streamer quotes had frozen and some of the quotes were just flat-out wrong, I was watching CNBC and I could see that the indexes were dropping but my streamer was frozen . I was basically trading blind . I really could not do much that day but I thought it was my computer or internet connection that was causing the problems .
 

As the days went by I eventually called Tech Support, the lines were usually busy but I was able to get through on a couple of occasions . I complained about the problems I was having with the quotes freezing and sometimes having totally wrong random quotes displayed . I was told to reinstall my Java and that it may be my ISP . I even asked if other people were calling in and they basically said No. I just could not figure out what was happening and even though I had called TD Ameritrade a few times nobody told me what the real problem was. By the time (1 month later) I realized what the bigger problem was I had already lost over $100,000 I  noticed that in addition to the other streamer problems like the quotes freezing or other website problems like not being able to log in , my level 2 option quotes were 2 to 3 minutes behind my level 2 stock quotes . I tried to call Tech Support but the lines were busy so I sent a message .

I did not get any reply from this message but I eventually called Tech Support again and someone suggested I use Think Or Swim . When I downloaded Think Or Swim I discovered that (To MY HORROR) the quotes I was getting from Command Center Streamer were wrong compared to Think Or Swim Quotes and that was the Primary reason for my loses . They knew the quotes were wrong but they just let me keep trading .

Before I knew about the lagging quotes I had considered borrowing $50,000 to wire into my account and keep trading . I would have lost all that money too because of this quote problem . The quote problem was never fixed . 4 months later when I asked Jeff Plummer why nobody ever contacted me about fixing the level 2 quote issue and why in August the issue had not been fixed, they shut my account down . They even shut down my wife’s account and told me not to bother ever applying to TD Ameritrade again . My opinion is they couldn’t fix the quote problem or did not want to fix it so they terminated my account so that I won’t be able to access Command center and the level 2 quotes ? How can anyone make money with a platform like this ? This is not an outage that lasted minutes or hours . This lasted for months ! If I did not figure out that my quotes were bad I may have deposited more money into my account and ended with more loses . The fact that they knew about the problem and refused to fix it baffles me .

 

MY LOSSES

I lost my income and my capital and the opportunity to make money and grow my capital . I have bills piled up and accumulating interest and late fees .

I trade for a living . This is how I make money to pay bills . This year 2010 from January to April before I got wiped out by the TD Ameritrade glitch I paid myself an average of $6,500 a month . I made over $100,000 in the first 3.5 months of the year – Jan, Feb, March and half of April . I have not made any money in the last 4/5 months because I have no money since I got wiped out by TD Ameritrade . I have also asked TD Ameritrade for $120,000 which is part of my capital that I lost due to a Software glitch that they were aware of and refused to do anything about . People trade to make money and not to lose money . To see my account balances go to the original letter I wrote TD Ameritrade .

CONCLUSION

An Outage/Glitch that lasts months is very very unacceptable . I would expect TD Ameritrade to do the right thing and take responsibility for this  Glitch just like the COO Dave Kelly said . No active trader can make money with a system that delivers wrong quotes every minute of every single day for months .

I would like TD Ameritrade to honor their company policy and make me whole by at least giving me back my $120,000,  because this loss was preventable . TD Ameritrade  knew about the lagging quotes and did nothing to prevent their clients from losing money . If clients had been notified about the bad quotes they could have minimized their loses .   Broker Dealers are bound by SEC laws and rules .

The Client Agreement that Jeff Plummer uses as an excuse to not be liable for the lagging quotes  is meant to be used when their are unforeseen technology issues like server failure or Network failure, hurricanes etc .. but not for well known technology issues  that they did nothing about . According to Section 29(b) of the Securities Exchange Act - the Client Agreement becomes void if a broker dealer violates sec laws . TD Ameritrade violated several SEC Anti fraud provisions that I listed above . The SEC Laws and FINRA Rules are superior to TD Ameritrades Client Agreement . In other words you can’t break the law and then try to protect yourself by saying that a client signed your agreement . That would be like putting a sign on a taxi that says NOT LIABLE FOR ACCIDENTS THAT OCCUR IF A DRIVER IS DRUNK .

I don’t want to deal with Jeff Plummer ( TD Ameritrade Compliance Manager ) anymore because he seems to be playing games . I have sent him over 10 mails asking him about making me whole per TD Ameritrades Company policy but he has NEVER acknowledged the policy or mentioned it in his correspondence  . This is a policy that TD Ameritrades COO talked about with DOW JONES .

I have sent 2 emails and 2 mails by courier to LISA HENOCH Chief Compliance Officer of TD Ameritrade but I am yet to hear from her . I want her to intervene in this case because I don’t have any confidence in the way Jeff Plummer is handling this case . If you know Lisa Henoch or any other executive at TD Ameritrade I would like you to forward this blog to them . All I want is for SOMEBODY to apply the company policy to me !

td ameritrade 10 million settlement

Upside to Wall Street’s Tech Glitches?

http://www.foxbusiness.com/industries/2012/09/07/upside-to-wall-street-tech-glitches/

 

Are the high-profile technical glitches experienced by firms like Knight Capital, Nasdaq and BATS actually good for the health of the capital markets?

Some experts think so.

The first major blowup came when alternative-trading firm BATS priced it IPO, only to withdraw it after a disastrous technical glitch. Then came Nasdaq OMX Group (NDAQ

NASDAQ OMX GROUP INC

 

 

) experiencing major system problems when it was inundated with orders for Facebook (FB) shares during the IPO. Most recently, a glitch at Knight Capital Group (KCG) caused chaos with stock trades, nearly bringing the firm down. 

Surely ugly for the companies involved, all of these issues are examples of what can go wrong without proper risk procedures in place. 

“What happened at Knight Capital will prove to be great for capital markets,” said Harpal Sandhu, co-founder and CEO of Integral Development Corp., a firm that develops risk management, analysis and foreign exchange trading software used by many different institutions, including major banks. “You better believe every firm like Knight Capital is looking at their systems and making sure things are in order.”

Sandhu believes that after a debacle along the lines of Knight Capital, everyone learns from it and, as a result, the marketplace gets stronger.

Wall Street firms are using computer systems to replace humans more than ever before, to be more competitive as firms get hammered by the economic downturn. These systems work more efficiently and faster than humans. More and more firms have entered the market to allow investors new avenues to trade stocks.  

Industry observers say what is so astonishing is just how quickly technology has been implemented in different areas within Wall Street firms. Entire firms that used to play a part in the market-making puzzle have been wiped out by technology and now the processes are done at the fraction of the cost and time.

“What we saw is equity automation really accelerate in the 2002 period as commissions came down dramatically,” said Brad Hintz, banking analyst at Stanford Bernstein. “Now we are seeing fixed-income become more automated.”

Morgan Stanley is reportedly looking to lay off several fixed-income traders and replace them with computers to cut costs, and Goldman Sachs has reportedly spent millions investing in new systems in the last few years. Goldman Sachs CFO David Viniar has publicly said that slightly more than 25% of all the firm’s employees are in the technology and IT space.  

“Most of the big banks and brokerages are spending 20-25% of their expense budget on technology,” said David Hilder, bank analyst for Drexel Hamilton.  “All of these tech problems and general failures of risk management have certainly caused every bank to think more intensely about operational risk.”

Another factor for more risk is that each of these firms has many different systems throughout, all of which need specific technology. And many are custom built, making it more difficult to keep compliance and checks in place.

“Frankly, there are so few of the large investment banks left, it doesn’t make sense to develop an off the shelf system to market to these banks,” said Hilder.  

In late 2009, the Securities Exchange Commission introduced the Market Access Rule to ensure financial firms have the proper risk controls in place. The rule requires brokers and dealers to have risk controls in place before giving customers access to the market. It requires brokers to place risk management controls and supervisory procedures in place to prevent erroneous trades.
The Market Access Rule was just being applied when Knight Capital’s technical glitch hit, causing sudden swings in stock prices and a surge in trading volume. The issue took almost an hour to be discovered and was ultimately stopped, but not before costing the firm $440 million. The mistake caused Knight Capital’s stock price to drop by 75% in just two days. 

Of the 140 stocks impacted, the SEC reversed trades in only six cases.

“The best thing the SEC did was to make Knight stick to those trades,” said James Angel, a finance professor at Georgetown University, and a director for Direct Edge, a computer-driven stock exchange in which Knight Capital is a shareholder. “That sends a very strong signal to every trading firm that they need to make sure nothing goes wrong, nothing fails.”

With new financial technology, regulators need to ensure that everyone in the market place has the right systems in place. But experts say it’s impossible to have every scenario covered.

“This is the nature of technology,” said Angel. “Mistakes will happen again, so we need to protect ourselves and when it happens we know how to deal with it.”

Basic trading programs monitor trading positions and profit and loss. When the system generates an order, if the order is larger than average, an alert is typically generated.  The solution towards better technology systems with good checks and balances is better risk management, experts say.

“These mistakes are a wake-up call and ultimately good for markets,” said Sandhu. “It forces firms to focus on operational risk management, focus on testing and the release test process.”

The fundamental culture shift is happening on Wall Street with more and more firms opting to bring in technology experts in leadership positions.  One recent example is the CME changing their leadership to focus more on technology.  CME CEO Craig Donohue, a lawyer by profession, was recently replaced by Lupinder Gill, the firm’s technology leader.

But not everyone is convinced automated computer systems are the answer.

“The firms that are going to win are the firms that are living and breathing technology,” said Sandhu.

Read more: http://www.foxbusiness.com/industries/2012/09/07/upside-to-wall-street-tech-glitches/#ixzz2OgMx03TE

Investigation into the Potential to Recover Thinkorswim Losses Continues

http://www.whitesecuritieslaw.com/2011/10/26/investigation-into-the-potential-to-recover-thinkorswim-losses-continues/

In August TD Ameritrade took the final steps to integrate the accounts from the acquired Thinkorswim into their trading network. When what was reported to be the final 250,000 customer accounts were integrated, TD Ameritrade admitted that they experienced some “issues.” A later report, also confirmed by TD Ameritrade, seems to indicate that issues related to the integration continued beyond a single incident.

The White Law Group has been working with damaged investors over the last several months to investigate potential securities fraud claims related to the integration problems. We have spoken to many traders who have experienced serious issues with their accounts resulting in significant losses.

Many of the damaged investors were trading in Thinkorswim’s Portfolio Margin Accounts. They report to have experienced difficulty on the Thinkorswim platform executing certain trades. Another common complaint has been that some traders have had issues with margin calls.

Many of these problems seemed to have happened in a similar time period, in early August, but reports indicate that problems with the integration of Thinkorswim into TD Ameritrade aren’t limited to just one period of time.

On September 30^th a TD Ameritrade representative told Bloomberg that “We encountered some issues just after market open this morning that impacted some of our clients, particularly those on our Thinkorswim downloadable trading platform…”

TD Ameritrade emphasized that the problems were fixed by later that same morning, but some clients were not pleased. One trader told Bloomberg, “I’m going to have to look at alternatives because this is not reliable.” It is understandable for traders that need a reliable trading platform in order to make a living to be concerned with these issues.

The White Law Group continues to gather details related to these Thinkorswim and TD Ameritrade platform issues in order to best determine how to represent clients in recovering their losses suffered as a result of the problems.

If you are a Thinkorswim client that has experienced difficulties since the August integration with TD Ameritrade and would like to speak to a securities attorney about your potential to recover losses or have information that may help us better represent other traders please call our Chicago office at 312/238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

FINRA Fines Citigroup Global Markets $2 Million for Errorneous quotes

http://www.finra.org/Newsroom/NewsReleases/2009/P118157

 

 

FINRA Fines Citigroup Global Markets $2 Million for Range of Trade Reporting

Violations

 

Firm Published Erroneous Quotations and Transactions at and Around Opening on a Quadruple Witch Expiration Friday

Washington, DC — The Financial Industry Regulatory Authority (FINRA) announced today that it has imposed a $2 million fine against Citigroup Global Markets for the erroneous publication of non-bona fide quotations and transactions at and around the NASDAQ market opening on a Quadruple Witch Expiration Friday; systemic Order Audit Trail System (OATS) reporting violations; fixed income transaction reporting violations; limit order display violations; and, related supervisory failures. These violations occurred in 2006 and prior years.

FINRA found, as a result of a referral from the NASDAQ’s MarketWatch Department, that Citigroup failed to properly monitor certain of its trading systems at the opening on June 17, 2005, a Quadruple Witch Expiration Friday. Quadruple Witch Expiration Fridays occur once each quarter, when stock index futures, index options, stock options, and options on stock index futures simultaneously expire.

These system failures resulted in the erroneous publication of approximately 6,800 non-bona fide transactions in more than 170 securities that the firm ultimately cancelled via Clearly Erroneous Petitions. The systems failures also resulted in the publication of thousands of non-bona fide quotations, which triggered executions by other firms at prices unrelated to the market value of the securities, requiring those firms to petition to cancel over 1,400 trades.

“Firms must establish and maintain operational controls and supervisory systems reasonably and effectively designed to ensure that their trading systems function correctly, especially on expiration days when price discovery is particularly important,” said Tom Gira, Executive Vice President of FINRA’s Market Regulation Department.

FINRA further found that Citigroup did not report approximately 6 million orders to OATS between Aug. 1, 1999 and July 10, 2006. From July 2002 through September 2006, Citigroup inaccurately reported or failed to report over 300,000 transactions to FINRA’s Trade Reporting and Compliance Engine (TRACE) and inaccurately reported or failed to report more than 480,000 transactions to the Municipal Securities Rulemaking Board.

In concluding this settlement, Citigroup neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA’s BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2008, members of the public used this service to conduct 11.6 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through comprehensive regulation. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms; writing and enforcing rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and firms.

AXA Rosenberg Settles Coding Lawsuit for $65 mln

http://sanfrancisco.ibtimes.com/articles/242154/20111102/axa-rosenberg-settles-coding-lawsuit-65-mln.htm

Money manager AXA Rosenberg and co-founder Barr Rosenberg agreed to pay $65 million to settle a lawsuit by investors who said they lost money after a computer coding glitch impeded the firm’s ability to manage risk.

Tuesday’s settlement came nine months after AXA Rosenberg, a unit of French insurer AXA SA , agreed to pay $217 million to cover client losses and a $25 million fine to settle related U.S. Securities and Exchange Commission civil fraud charges.

Barr Rosenberg in September accepted a $2.5 million civil fine and lifetime ban from the securities industry to settle his own SEC case.

According to court papers, programmers introduced the coding error in January 2007, exposing clients to excess risk and causing losses that would not otherwise have occurred.

The error was found in June 2009 but not fixed for five months, and then not revealed to clients until April 15, 2010, after the SEC had begun examining the problem.

In a filing with the U.S. DistrictCourt in San Francisco, lawyers for four pension funds leading the investor lawsuit said the $65 million settlement marks a “substantial recovery,” above and beyond the sum obtained by the SEC.

The settlement requires court approval. A hearing has been scheduled for Feb. 17, 2012.

Neither AXA Rosenberg nor Barr Rosenberg admitted wrongdoing in settling with the SEC.

AXA Rosenberg managed $29 billion of assets in June 2011, down from about $70 billion at the end of 2009, in part reflecting client withdrawals stemming from the coding error.

The case is In re: AXA Rosenberg Investor Litigation, U.S. District Court, Northern District of California, No. 11-00536.

What People Are Saying About TD Ameritrade on ConsumerAffairs.Com

Go Here to See what people are saying about TD Ameritrade  http://www.consumeraffairs.com/finance/ameritrade.html

Some Reviews Below 

On September 30th, 2011, TD Ameritrade’s trading platform failed during regular trading hours. There was no possibility to enter new orders nor the existing orders were getting executed. Trading was unavailable. My attempts to close some of the positions in the morning on September 30th, 2011 were absolutely unsuccessful due to TD Ameritrade’s system failure. Due to sharp market moves, some of my stock and option positions significantly decreased in value by the end of the trading session on September 30th, 2011. This ultimately resulted in a margin call. On October 4th, 2011, TD Ameritrade decided to sell out most of my stock positions to cover the margin call. That sellout resulted in loss of $54,000.00, which is a direct result of TD Ameritrade’s system failure on September 30th, 2011. 

Yuriy of Bronx, NY

TD Ameritrade has the most screwed up, error-filled statements I have ever encountered. They are ripping people off. There is absolutely no way they can’t be. On one of my statements, it says I lost $5006.92. I owned 1.85 shares at $23.15, with market value of $42.83. That is the extent they had right. The statement says I had unrealized gain (loss) of $50006.92. When I called to inquire about this and other discrepancies, they made up some nonsense about cost basis being wrong, which clearly isn’t. Basically, I cannot account for over $10000 loss to my account and neither can they. I will not use them anymore. Don’t deposit money with them. You will lose it.

Marie of drepae, UT

The balance of an account on opening should be the same, as it was on the previous day closing. Ameritrade never informs you of the value of your account on closing, and unless you have made a note yourself, you would never know if the amount showing next day is correct. On several occasions, I found out discrepancies with numbers reported between market closings and openings. When I reported this to Ameritrade, their representatives came up with unbelievable excuses; such as they don’t have account details on previous closings, or the account were affected by after hours trading.

Ameritrade representatives will never give you the telephone number or email of their compliance officer. Instead, they will ask you to contact their president’s email. Sometimes, when they are cornered, they pretend to put you on hold,and they never come back. They are also very unprofessional when it comes to legal matters, such as disposition of trusts or joint accounts. In many cases, I have experienced that they are have their agents calling parties involved, asking them to dump their partners in favor of Ameritrade consultants. If you have friends in joint accounts, expect a great deal of gossip and interference from these expert investment “sharks”.

Demetrius of Valencia, PA

Direct Edge Exchanges Hit With SEC Sanctions for System Glitches

 

The article below is from http://www.foxbusiness.com/industries/2011/10/13/direct-edge-exchanges-hit-with-sec-sanctions/

–Regulators say Direct Edge exchanges broke rules, made errors

–Millions of dollars in trading losses blamed on violations, says SEC

–Direct Edge says it is responding, takes exchange obligations seriously

(Updates throughout with additional detail on exchange incidents, background.)

The U.S. Securities and Exchange Commission on Thursday sanctioned electronic stock exchange operator Direct Edge for violations and mistakes that drove millions of dollars worth of trading losses, according to regulators.

Regulators charged that in November 2010 the company helped exchange members fix erroneous trades driven by its “untested computer code,” breaking transaction rules and Direct Edge’s own guidelines as an exchange, according to regulators.

In a separate incident last April, an employee error disrupted Direct Edge’s trading systems, which the company failed to remedy before millions in losses mounted for customers, regulators said in a statement Thursday.

The two stock exchanges run by Direct Edge, as well as its order-routing unit, were censured and agreed to take “remedial measures,” according to a notice from the SEC.

“Direct Edge was required to police not only its members’ conduct, but its own conduct as well,” said Robert Khuzami, director of the SEC’s division of enforcement, in a statement.

Direct Edge said it had formed a plan to respond to the issues, including “significant” investments in technology and staff.

“Our entire organization stands committed to these efforts and conducting ourselves as a model exchange operator,” representatives of the company said in a separate statement.

Based in Jersey City, N.J., Direct Edge runs the newest of the 13 full-fledged stock exchanges operating in the U.S., having converted its electronic platforms to exchange status in July 2010. Its EDGA and EDGX platforms account for approximately 9.9% of daily trading in domestic shares this month, according to data from BATS Global Markets.

The company is about one-third owned by the International Securities Exchange, the U.S. options unit of Deutsche Boerse AG (DBOEF, DB1.XE). Trading firms Knight Capital Group (KCG) and Citadel LLC also own stakes, along with Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM).

The Nov. 8, 2010 mishap arose from a software update that included a bug. If a member firm of the exchange happened to include a decimal point in the field for the quantity of shares intended to be bought or sold at Direct Edge, the number of shares transacted wound up far higher than the intended amount.

Three firms fell victim to the error. While one submitted a loss claim for $105,000, which Direct Edge honored, the other two refused to accept the positions–about 27 million shares’ worth of 1,000 different stocks–and turned them over to the exchange operator, where officials opted to trade out of the position over a period of days using the company’s internal broker unit, used to route trades to other markets.

That trading violated Direct Edge’s exchange rules, and initial uncertainty over the total size of the position resulted in some transactions being incorrectly marked, breaking some regulations around short-selling. Direct Edge lost about $2.1 million on the trading, according to regulators’ findings.

On April 13 of this year, an employee updating Direct Edge’s databases made an error that took down the company’s EDGX platform beginning at about 3:19 p.m. ET and lasting until the end of the session. For 24 minutes, the exchange continued to broadcast quotes to public data feeds, violating federal rules, and several members filed loss claims for more than $668,000, regulators said.

The firm cooperated with the SEC probe and agreed to settle cease-and-desist and administrative proceedings without admitting or denying fault in the matter, according to regulators. Direct Edge has boosted risk management and technology controls in response.

Other exchanges have fallen prey to similar mishaps over the past year. In September 2010 futures exchange company CME Group Inc. (CME) briefly submitted about 30,000 “test orders” into the live market, and CME paid about $4.7 million to compensate customers.

Nasdaq OMX Group Inc. (NDAQ) paid out roughly $3 million after a software glitch in April fed incorrect prices to trading firms and halted business in more than 80 securities.

Copyright © 2011 Dow Jones Newswires

Read more: http://www.foxbusiness.com/industries/2011/10/13/direct-edge-exchanges-hit-with-sec-sanctions/#ixzz1bdQ6ezvM

The article below is from  http://www.fiercefinanceit.com/story/sec-sanctions-direct-edge-faulty-systems-controls/2011-10-15

The SEC has taken Direct Edge to task for two snafus that revealed weaknesses in order processes and compliance, resulting in million of losses by trading clients.  The exchange has agreed to a battery of remedial measures, without admitting or denying guilt. The two incidents:

• On Nov. 8, 2010, untested computer code changes resulted in EDGA and EDGX overfilling orders submitted by three members. The unwanted trades involved an estimated 27 million shares in about 1,000 stocks, totaling roughly $773 million. At the exchanges’ instruction, one member traded out of the overfilled shares and submitted a claim of $105,000 of losses. “When the other members refused to do likewise, the exchanges assumed and traded out of the overfilled shares through the routing broker’s error account, in violation of their own rules.” The SEC also found that in resolving the overfilled trades, which cost the exchanges about $2.1 million, DE Route “failed to mark the orders as short or mismarked them as long, and failed in its Regulation SHO obligation to ascertain if shares were available to borrow.
• On April 13, 2011, an EDGX database administrator inadvertently disabled database connections, disrupting the exchange’s ability to process incoming orders, modifications, and cancellations. Several EDGX members to file claims for more than $668,000 in losses. “EDGX received internal alerts immediately and got external notifications soon after,” including from members seeking to cancel unfilled trades and from numerous trading centers that were bypassing EDGX. EDGX waited 24 minutes after the outage to remove its quotations from public market data, and violated the Regulation NMS “by failing to immediately identify its quotations as manual quotations.”

The agreed-upon remedy involves basic GRC practices. The firm has among other things agreed to implement an ERM framework and an information security program. It will hire an information security director, a corporate training director, and a chief compliance officer. In addition, it will enhance their systems to prevent recurrences.
See Case Document on SEC’s Site  http://www.sec.gov/litigation/admin/2011/34-65556.pdf

Orval L. Beckmon Vs TD Ameritrade – Customer Loses $1 Million Arbitration Case

See Finra Case Documents Here http://finraawardsonline.finra.org/viewdocument.aspx?DocNB=51031

Orval L. Beckmon ("Claimant") was represented by Barry D. Estell, Esq., Mission, Kansas. 
TD Ameritrade, Inc. and TD Ameritrade Clearing, Inc., hereinafter collectively referred to as 
"respondents," were represented by James J. Vihstadt, Esq., TD Ameritrade, Inc., Omaha, 
Nebraska
Claimant asserted the following causes of action: breach of fiduciary duty; breach of 
contract and violation of NASD Rules; negligence; violation of the Kansas Securities Act; 
and violation of the Kansas Consumer Protection Act. The causes of action related to 
Claimants allegations that Respondents forged option approval documents and failed to 
supervise Claimants accounts. Claimant asserted that Respondents induced Claimant to 
trade unspecified options with the offer of "free" trades. FINRA Dispute Resolution 
Arbitration No. 10-05785 
Award Page 2 of 4 
Unless specifically admitted in their Answer, Respondents TD Ameritrade, Inc. and TD 
Ameritrade Clearing, Inc. denied the allegations made in the Statement of Claim and 
asserted affirmative defenses, 
RELIEF REQUESTED 
Claimant requested an award in the amount of: 
Actual/Compensatory Damages $477,680.00 
At the close of the hearing, Claimant requested an award In the amount of: 
Actual/Compensatory Damages $477,680.00 
Double Damages $477,680.00 
Attorneys' Fees $318,480.00
------------------------------------------------------------------------------------------------------------
After considering the pleadings, the testimony, and the evidence presented at the hearing, 
the Panel has decided in full and final resolution of the issues submitted for determination 
as follows: 
1. ) Claimants claims, each and all, are hereby denied and dismissed with 
prejudice; 
2. ) Other than Forum Fees which are specified below, the parties shall each 
bear their own costs and expenses incurred in this matter; and 
3. ) Any relief not specifically enumerated

TD Ameritrade Loses $228,000.00 Arbitration – In Christopher and Angela Allen Vs Think or Swim/TD Ameritrade

See Actual Finra Award Document here http://finraawardsonline.finra.org/viewdocument.aspx?DocNB=51092

In the Statement of Claim, Claimants requested: (1) compensatory damages in the 
amount of $576,000.00; (2) accrued interest; (3) costs; (4) such other further relief as 
deemed appropriate by the Panel; and, (5) a finding in their favor on their Chapter 517 
claims so as to allow them to seek an award of attorneys' fees from a court of 
competent jurisdiction
AWARD 
After considering the pleadings, the testimony and evidence presented at the hearing, 
and the post-hearing submissions (if any), the Panel has decided in full and final 
resolution of the issues submitted for determination as follows; 
Respondent is liable for negligence and shall pay to Claimants Christopher M. Allen and 
Angela Allen compensatory damages in the amount of $228,000.00 plus interest 
accruing at the rate of 6.0% per annum from April 26, 2010 until paid in full. 
Any and all requests for relief not specifically addressed herein, including Claimants' 
request for a finding in their favor on their Chapter 517 claims so as to allow them to 
seek an award of attorneys' fees from a court of competent jurisdiction, is denied. 
--------------------------------------------------------------------------------------------------
Claimants Christopher M. Allen, Angela Allen, Angela Allen IFIA, and Christopher M. 
Allen IRA, hereinafter collectively referred to as "Claimants": Bruce W. Barnes, Esq., 
Bruce W. Barnes, P.A., Safety Harbor, Florida. 
Respondent thinkorswim by TD Ameritrade Inc., hereinafter referred to as 
"Respondent": Howard  J . Kaplan, Esq. and Brent Starks, Esq., Arkin Kaplan Rice, LLP, 
New York, New York.

 

 

 

 

TD Ameritrade Fined $2.65 Million for Finra and Nasdaq Violations

TD Ameritrade failed to deliver product descriptions for millions of  ETF purchasers and was fined $2.65 Million

See link to complete Pdf document  http://www.nasdaqtrader.com/content/marketregulation/NASDAQ/DisciplinaryActions/TDAR_2011.pdf

 

ThinkorSwim Is Getting Ruined By TDAmeritrade

Article originally from     http://www.shareplanner.com/humor/3093-thinkorswim-is-getting-ruined-by-tdameritrade.html

Well apparently ThinkorSwim thought it might be a bit amusing to throw traders even more of a curve ball with this already manic/volatile market by making their services inaccessible to everyone. I’ve tried the mobile, TOS and TDAmeritrade sites and absolutely nothing is working.

Call them up, and they will give you an approximate five minute hold time, but it is more like one hour and counting.

So this is pretty much the last straw in this once great marriage between ThinkorSwim and I. I originally left TDAmeritrade for her, but in strange twist of events, TOS engaged in relations with TDAmeritrade. I tried to be patient, and hope for the best, and forgive, but sometimes you just have irreconcilable differences and you just have to move on.

Apparently she didn’t value my orders either, and make them a priority to get filled. I confronted her on this, but she insisted that it had nothing to do with TD. But I had second thoughts, figuring their might be some hankey-pankey going on in the behind my back.

And now I find myself wondering why she is locking me out of my account this morning by making her platform inaccessible.

Breakups are so hard, but I can assure you I’m not going to drop that infamous line of “it’s not you, it’s me” because quite honestly it’s all you!

But hey, we can still be friends.

 

 

 

When Great Brands Go Bad: A Day in the Life of a Reluctant TD Ameritrade Customer

Article take from  http://www.chicagosean.com/2011/10/01/when-great-brands-go-bad-a-day-in-the-life-of-a-reluctant-td-ameritrade-customer/

At 8:31 local time in Chicago yesterday morning (Friday, Sept 30), for all intents and purposes, the lights when out at thinkorswim. The trading platform went dark, there was no way to contact customer service, they were nowhere to be found on Twitter or StockTwits, and for the next one hour and fifteen minutes during some of the most volatile market conditions many of us can remember, thousands of thinkorswim customers were left to wonder where their positions were and whether or not their open orders were being executed. You can imagine the panic coursing through the veins of big options traders holding short options to cover on expiration day for quarterly and weekly options.

I consider myself one of the lucky ones. My positions were safe as the market cooperated with me. Lucky. But I’m certain others weren’t as lucky.

What makes this a hard piece for me to write is that I love thinkorswim. Seriously. Love.

I’ve been a staunch supporter of their platform since the very first day I became a customer and would recommend them to every person that inquired of me who to select as their options trading platform. Never a doubt – “choose thinkorswim” would be my pat answer. “…They are the Gold Standard.”

I love that they are local to me. Love their customer service. Love their educational offerings. Love their platform. Love their mobile and iPad apps. Love their features. Love their stability. Love their reasonable commission rates. And love their commitment to being cutting edge, customer-loving, and constantly improving.

But perhaps I should have said LOVED, in the past tense. Because the thinkorswim that I loved and had been instrumental in my early options trading education was recently sold to TD Ameritrade. And since the handoff took place, thinkorswim has become a shadow of its former self.

Up until about six or seven months ago, I couldn’t remember many serious data disruptions on the platform that lasted more than a couple minutes. Even during the “Flash Crash” they performed admirably. Not perfect, but in that situation they certainly earned the benefit of the doubt.

These days, it seems almost inevitable that data will stream slowly during the frequently busy open and closing trading periods and also whenever any major market moving news is breaking. Alerts that I’ve set are constantly late in triggering, and often orders go unrecognized for far too many agonizing seconds when speed of execution is of paramount importance. And when I need them most, the customer service that used to be the front window to their amazing support is now too often slow to respond to my inquiries.

Yesterday was a tough day in a series of exceedingly bad days for the platform. They made people upset, no question. But one way they could’ve alleviated some of the bad will that was created yesterday would’ve been to take to StockTwits and Twitter to announce to their thousands of actively trading customers what was happening, what the next steps were, and when we could expect to be back up. Customers needed this yesterday… badly. Instead, we were met with unanswered phone calls and silence everywhere else.

 

READ THE REST OF THE STORY HERE http://www.chicagosean.com/2011/10/01/when-great-brands-go-bad-a-day-in-the-life-of-a-reluctant-td-ameritrade-customer/

TD Ameritrade’s Thinkorswim Clients Miss Morning Trading – Sept 2011

Some clients at TD Ameritrade Holding Corp. (AMTD) weren’t able to get into their Thinkorswim accounts this morning.

“We encountered some issues just after market open this morning that impacted some of our clients, particularly those on our Thinkorswim downloadable trading platform,” Kim Hillyer, a spokeswoman for Omaha, Nebraska-based TD Ameritrade, said in an e-mail. “We were able to implement a resolution mid-morning, and clients were able to use all of the platform’s functionality thereafter.”

Rick Arroyave, a 48-year-old trader in Dallas, said he couldn’t log in to make a trade after the stock market opened. A message was displayed on the website for users with a phone number to call. He was able to access his account at about 10:50 a.m. New York time.

“It’s an absolute mess,” said Arroyave, who’s been using Thinkorswim for about five years to trade stocks, options and futures. “I’m going to have to look at alternatives because this is not reliable.”

In 2009 TD Ameritrade bought options brokerage Thinkorswim Group Inc. for $749 million to expand beyond equities. The online broker transferred more than 250,000 Thinkorswim accounts to the TD Ameritrade platform in August. Some clients experienced issues with electronic trades in August following the integration.

To contact the reporter on this story: Margaret Collins in New York atmcollins45@bloomberg.net. Alexis Leondis in New York at aleondis@bloomberg.net

To contact the editor responsible for this story: Rick Levinson at rlevinson2@bloomberg.net.

See Link — http://www.bloomberg.com/news/2011-09-30/td-ameritrade-s-thinkorswim-clients-can-t-get-trading-access.html?cmpid=yhoo

 

Former TD Ameritrade Employee Wins $1 Million Settlement from TD Ameritrade

An employee of TD Ameritrade in the U.S. was awarded a $1 million settlement to cover unspecified damages, unpaid wages and bonuses and other complaints (In the Matter of the FINRA Arbitration Between Amir Ali Monsefi,Claimant, vs. TD Ameritrade, Inc., Respondent(FINRA Arbitration 09-06492, September 6, 2011)).

In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in November 2009, Claimant Monsefi sought to recover unspecified damages, unpaid wages, bonuses, interest, and other relief based upon allegations including breach of contract; interference with economic relations; Wages and Labor Code violations; fraud; and unfair business practices relating to the termination of his employment by Respondent TD Ameritrade

See On Finra Site http://finraawardsonline.finra.org/viewdocument.aspx?DocNB=49912

 

NFA fines FXCM $2 million for slippage malpractices

http://forexmagnates.com/nfa-fines-fxcm-2-million-for-slippage-malpractices-fxcm-will-credit-clients-back/

On August 12, 2011, NFA issued a Complaint charging FXCM with retaining gains derived from positive price slippage; failing to adopt or carry out adequate procedures to ensure the efficient execution of all customer orders; failing to treat all customers equally when giving price adjustments; and failing to adequately investigate suspicious activity in all customers’ accounts. The Complaint charged FXCM and Niv with failing to supervise.

DECISION:

On August 12, 2011, pursuant to a settlement offer submitted by FXCM and Niv, FXCM was ordered, within 30 days of the effective date of the Decision, to make a good faith effort to credit the accounts of its customers the amount of positive slippage which its customers experienced on their trades from and after June 18, 2008. FXCM shall provide verification to NFA of these credits. In addition, FXCM was ordered to pay $2,000,000 to NFA as a monetary sanction. In the future, FXCM will not engage in price slippage or margin liquidation practices; and, in the future, when FXCM voluntarily gives a customer a price adjustment, it shall also determine whether or not it is appropriate to make the same price adjustment for other similarly situated customers.

Finally, within 30 days of the effective date of the Decision, FXCM was ordered to adopt and implement adequate procedures – or enhance existing procedures – to ensure the efficient execution of customer orders and to ensure compliance with NFA’s AML requirements.

READ MORE  http://forexmagnates.com/nfa-fines-fxcm-2-million-for-slippage-malpractices-fxcm-will-credit-clients-back/

TD Ameritrade backed out of trade

http://www.complaintsboard.com/complaints/cancelling-trade-two-hours-later-c476321.html

Cancelling trade two hours later Complaint Rating:  Company information: TD Ameritrade United StatesI bought 80 bonds at what I thought was a very good price on the morning of 7/11/11. Within minutes, my account shows the bonds and their market price. Showing a nice profit, I put them up for sale a few hours later. About 15 minutes after putting them up for sale, my account value plummets by $70K and the bonds are gone. Not sold… gone. I call up and they tell me the original price was a mistake, and backed out of the earlier transaction. Don’t count your chickens even after they hatch with TD Ameritrade. I doubt they’d ever consider backing out of a deal if I was on the losing side.

Sec Fines Investment Bank for System Failures

http://www.chadbourne.com/files/Publication/e86029c6-5f81-4b64-9259-8ad70be8c7b0/Presentation/PublicationAttachment/2a36c842-6809-4afe-bf90-862e537726eb/05-21-07-SEC%20Fines%20Investment%20Bank.pdf

SEC Fines Trader and BNY Mellon $24 Million for “Best Execution’”Scam

http://www.securitiestechnologymonitor.com/news/bny-mellon-to-pay-fine-26820-1.html

According to the SEC, he deprived many among MIS’s 600 plan clients of best execution by executing their orders at stale or inferior prices – often outside the US National Best Bid and Offer (NBBO) – in cross trades that gave better prices to hedge fund clients. NBBO refers to the SEC rule requiring brokers to guarantee that their customers receive the best prevailing ask price when they purchase securities.

Here is how Shaw perpetuated his scam, according to the SEC:

He manipulated the latency of a a regional U.S. exchange’s order management system. In December 2006, the regional exchange, added a functionality called the “validated cross window.

The “validated cross window” allowed member firms of the regional exchange to freeze the NBBO for a security.

That’s how Shaw to obtain lower prices for hedge fund clients that wanted to cross-sell orders from customers of a plan or vice versa.

“The validated cross window validated a market, meaning the NBBO, by capturing and freezing a snapshot of the NBBO market for a security at the moment a member firm broker typed the security symbol into the system. At the same moment, a window expiration timer was initiated.

The timer gave the broker up to three minutes to fill in the required fields including quantity and price, and to submit the trade for execution and reporting.”

Read the full story here http://www.securitiestechnologymonitor.com/news/bny-mellon-to-pay-fine-26820-1.html

TD Ameritrade Best Exectution

See Sec Document http://www.sec.gov/litigation/admin/2011/34-63724.pdf

AXA Rosenberg fined $242 Million for hiding and not fixing computer glitch from clients

 

http://online.wsj.com/article/SB10001424052748704376104576122642878858736.html

A unit of French insurer AXA SA agreed to pay $242 million to settle fraud accusations by the Securities and Exchange Commission that it hid from clients for nearly a year a serious software glitch in a quantitative investment model.

 

The agreement—announced Thursday by the SEC, AXA Rosenberg Group LLC and two subsidiaries of the Orinda, Calif., firm—is the first of its kind against quantitative investment funds. Such funds use sophisticated computer models to determine trading strategies.

 

The SEC has intensified its scrutiny of quantitative-trading firms since last year’s “flash crash,” which deepened concerns that rogue computer models could unleash chaos in financial markets.

 

“This is a wake-up call to quant managers who might otherwise rely on a secretive culture and complex computer models to keep material information from investors,” Bruce Karpati, co-chief of the SEC’s asset-management unit, said in an interview.

 

AXA Rosenberg, which has $31 billion in assets, didn’t admit or deny wrongdoing as part of the settlement.

 

Terms of the deal call for the firm to pay a $25 million fine, hire an outside consultant to strengthen its compliance controls and repay investors $217 million in losses caused by the error.

 

The SEC said a coding error disabled certain risk-management controls, causing 608 of AXA’s 1,421 client portfolios to suffer losses.

 

The investment-management firm notified clients of the coding error last April. In June, AXA said that two top employees “acted to limit dissemination of information regarding the error and to preclude discussion about its correction and communication at the proper levels in the firm.”

 

AXA said Thursday that it hopes the settlement will mark the “beginning of a new era.” Investors have punished AXA Rosenberg since the glitch was disclosed, withdrawing half of the $62 billion in assets under management as of April.

 

The SEC revealed new details of efforts taken to cover up the computer error by senior management at AXA Rosenberg and its quantitative-research arm, called Barr Rosenberg Research Center LLC.

 

After a junior employee discovered the error in June 2009, a “senior official” ordered staff to keep quiet and not fix the problem, the SEC said Thursday. The agency said clients who voiced “substantial concerns” about the poor performance of their portfolios were told it was due to market volatility and other factors, not the model’s failings.

 

In October 2009, the unidentified senior official told an AXA Rosenberg board meeting convened to discuss the poor investment performance that he was “not aware of significant” mistakes in the model, the SEC said.

 

The firm’s chief executive later learned about the error from another employee, but AXA Rosenberg didn’t notify the SEC about the glitch until the firm was informed in March 2010 that the agency was about to conduct an examination.

 

People familiar with the matter said the senior official is Barr Rosenberg, chairman of AXA Rosenberg at the time of the glitch. Mr. Rosenberg and former research director Tom Mead, another top employee involved in the coverup, according to the firm, no longer work there. Messrs. Rosenberg and Mead couldn’t be reached for comment. Lawyers for AXA Rosenberg didn’t immediately return calls seeking comment.

 

The SEC said its investigation into the matter is continuing. The probe is focusing on individuals involved in the coverup, according to people familiar with the matter.

 

“We deeply regret that the coding error adversely impacted many of our clients,” Dominique Carrel-Billiard, chairman of AXA Rosenberg, said in a statement.

 

The case is likely to be just the first by the SEC as it steps up scrutiny of the quantitative-investment sector. Quantitative equity managers had about $400 billion of assets under management as of December, according to Barclays Capital.

 

SEC officials want to know if quantitative-trading firms do enough to monitor their algorithms for coding errors that could amplify risks of losses or disrupt markets, said people familiar with the matter.

 

Such errors could expose firms to enforcement action, even if there is no intention by the firm to manipulate the market, according to people familiar with the matter.

 

The SEC also is looking at the whether investors are being given sufficient information about the levels of risk inherent in the computer models, according to people familiar with the situation. They said investigators are probing whether quantitative investors might be purposely coordinating trades in ways that distort prices, potentially disadvantaging other investors.

 

 

SEC to Brokers: Execs on Hook for Operational Glitches

February 22, 2011
Chris Kentouris

Senior ranking brokerage operations and operational risk executives beware: the Securities and Exchange Commission now says that the buck stops with you, when it comes to proving you have sound procedures in place.

“The SEC can’t delve into every business line at the brokerage firm so it is looking to get a more holistic view of operations before it focuses on specific units, says Loren Schechter, a partner in the New York office of law firm Duane Morris. “That means senior level executives will be nailed for any regulatory errors.”

Funding increases for the SEC and the Commodity Futures Trading Commission, agencies responsible for rulemaking under the financial regulation overhaul enacted in 2010 are being held up by Congress. SEC Enforcement Director Robert Khuzami has said that his unit has postponed technology upgrades and hiring over concerns that it won’t get the funding it needs.

On February 8, Carlo di Florio, the SEC’s Director of the Office of Compliance Inspections and Examinations provided some inkling of the SEC’s newfound direction.

He said his office will review enterprisewide risk including how business units manage risk and whether” risk management, control and compliance are embedded into the business processes of the brokerage firm.”

“While the SEC has sporadically cited the need for broker-dealers to address enterprise-wide risk the presentation by di Florio offers better insight into the types of questions which broker-dealers will be asked to address durng exams.,” says Edward Pittman, counsel in the Washington, DC office of Dechert LLP. “One area they may inquire about is the firm’s procedures for how material operational errors are elevated to senior management.”

Di Florio’s stance appears to have been exemplified in the case of quantitative fund manager Axa Rosenberg, who on February 3 agreed to pay a whopping $242 million for a coding error in its risk model. Of the $242 million, $217 million was to cover investor losses and $25 million was for a civil penalty. The SEC’s beef: although the error was discovered in June 2009, senior management did not learn about it until it was being fixed in the “fall of 2009.”

The SEC’s Office of Compliance Inspections and Examinations was not notified of the error until March 2010 and AXA’s clients – some of the world’s largest pension plans—were told a month later. In addition, when the error was initially discovered the clients had been told that the underperformance of their portfolios resulted from market volatility and other factors.

Schechter recommends firms with large trading operations focus on whether they can meet best execution practices and document their procedures for algorithmic trading, high frequency trading and sponsored access. For retail firms, the focus should be on appropriate customer disclosures, he says.

Third-party processing firms, namely correspondent clearing firms, should concentrate on appropriate protection of customer assets and computer glitches. Those recommendations appear to be the same issues that the Financial Industry Regulatory Agency has said it will tackle in its exams of broker- dealers this year.

Here’s a rundown on the five key questions Di Florio said that the SEC will ask.

See Link to Article  Execs on Hook for operational glitches 

Mark Haines, CNBC Anchor, Dies at 65

Mark Haines, a longtime anchor at CNBC, died at his home on Tuesday evening, the network said on its Web site. He was 65.

CNBC did not disclose the cause of death.

For years, Mr. Haines was one of the prominent faces of CNBC, often serving as a jocular emcee for the morning market activity. He most recently worked as one of the co-anchors of the network’s “Squawk on the Street” alongside Erin Burnett, who left CNBC earlier this month. His last day at work was on Friday.

He is survived by his wife, Cindy, and his two children, Matthew and Meredith.

Below is the internal CNBC memo on Mr. Haines’s death:

It is with deep regret and a heavy heart that I let you know that Mark Haines passed away last night in his home.

I know all of you join me in sending our heartfelt condolences to Mark’s wife, Cindy, his son, Matt, and his daughter, Meredith.

Mark has been one of the building blocks of CNBC since the very beginning, joining us in 1989. With his searing wit, profound insight and piercing interview style, he was a constant and trusted presence in business news for more than 20 years. From the dot-com bubble to the tragic events of 9/11 to the depths of the financial crisis, Mark was always the unflappable pro.

Mark loved CNBC and we loved him back. He will be deeply missed.

When we have details on the arrangements, I will communicate them to you.

http://dealbook.nytimes.com/2011/05/25/mark-haines-cnbc-anchor-dies-at-65/

TD Ameritrade Names Marvin W. Adams New Chief Operating Officer/COO

ALSO SEE  TD  Ameritrade Fires COO  Dave Kelley http://stockmarketloss.wordpress.com/2011/01/21/td-ameritrade-fires-coo-david-kelly/ I would like someone to honor TD Ameritrades Policy. Jeff Plummer – Compliance Manager has refused to honor it ! See  http://stockmarketloss.wordpress.com

OMAHA, Neb.–(BUSINESS WIRE)– TD Ameritrade Holding Corporation (NASDAQ:AMTD – News) today named Marvin (“Marv”) W. Adams as the Company’s new chief operating officer . He will join the Company in April and will lead all IT and operations functions, including systems development, data centers and infrastructure, networks, project management and process improvement, and brokerage clearing and operations. 

Adams comes with more than 30 years of operational and technology experience, much of which he served in the financial services industry. He most recently served as the executive vice president of shared services for TIAA-CREF, where he oversaw technology and led IT strategy and policy. His teams provided the service and technology for the company’s products, clients and corporate functions, and were also responsible for initiatives focused on quality client service.

“Marv Adams has an outstanding track record of building great teams and helping businesses succeed through technology,” said Fred Tomczyk, president and chief executive officer at TD Ameritrade. “He is highly respected in the technology field, and we are confident that his deep expertise will help us leverage technology in everything we do. He is a great operational and cultural fit for our organization, and we couldn’t be more pleased to have him join our team.”

Prior to joining TIAA-CREF, Adams served in a financial leadership capacity with several other notable organizations, including Fidelity Investments, Citigroup, Bank One Corporation, Ford Motor Company and Xerox. He holds a Bachelor of Science Degree in Electrical Engineering from Michigan State University.

TD Ameritrade Lawsuit _Brett L. Eliason Vs TD Ameritrade_ $7 Million-Fraud and Deliberately Suspending trading account to convert fund

TD Ameritrade arbitration case . The claimant won $7 Million . TD Ameritrade deliberately locked the client out of his account and then sold all his securities for their own profit .

Claimant asserted the following causes of action in the Statement of Claim: 1) breach of contract; 2) breach of covenant of good faith and fair dealing; 3) conversion; 4) breach of FINRA Rules; 5) intentional Infliction of emotional distress: 6) negligent infliction of emotional distress; 7) negligence; and 8) tortious interference with economic relations. The causes of action relate to the suspension of trading account that relied on margin credit.

http://finraawardsonline.finra.org/viewdocument.aspx?DocNB=44021

TD Ameritrade Lawsuit_Hoffman Vs TD Waterhouse_Unauthorized Trades

NEW YORK–TD Waterhouse Group was sued by a New Mexico investor who claims the Internet broker made unauthorized online trades to generate larger commissions, according to reports.

In a suit filed in U.S. District Court in Manhattan, Tony H. Hoffman of Albuquerque alleges the company’s online unit processed two trades for shares of Shop At Home even after Hoffman canceled the trades and received email confirmation of their cancellation, the Wall Street Journal reported.

Class-action status is being sought for the suit, which also alleges Waterhouse charged high commissions to Hoffman’s account to try to collect fees owed; TD Waterhouse wouldn’t comment as it hasn’t yet seen the suit, the paper said.

http://www.zdnetasia.com/net-broker-sued-for-alleged-unauthorized-trades-13025305.htm

TD Amerirade Lawsuit_Holland vs TD Ameritrade_Securities Violation and Fraud

On January 4, 2011 the U.S. District Court for the Eastern District of California issued unpublished opinion dismissing claims by an investor against online broker TD Ameritrade.   In Holland v. TD Ameritrade, Inc., 2011 U.S. Dist. LEXIS 395, an investor who apparently lost money trading online brought claims against the broker for, among other things, RICO violations, securities fraud and negligence.

Under the negligence claims, the investor claimed that the broker “failed to set up safeguards to identify and/or protect plaintiff against harmful trading. Plaintiff demonstrated a lack of understanding and need for protection and/or supervision, but defendant allowed plaintiff to continue to act even after knowing the harm to plaintiff.  This allowed defendant to continue to profit from Plaintiff’s harm.”   The investor’s negligence claims all related to some failure to protect the investor from his own actions.  The court ruled that no duty existed to support these claims.

The court granted broker’s Rule 12(b)(6) motion as to all claims, with limited leave to amend.  The court also said that the broker could seek arbitration in response to any amended complaint filed by the investor.

http://caprofessionalliabilitylaw.com/2011/01/06/online-broker-not-liable-for-preventing-investor-from-losing-money/

TD Ameritrade Lawsuit _ Jones Vs TD Ameritrade_Negligence and Failure to Execute trades.

Claimant asserted the following causes of action: negligence and failure to execute trades.
The causes of action related to Claimant’s allegations that a problem with Respondent’s
computer system prevented Claimant from selling his stocks. Claimant further stated that
Respondent failed to obey Claimant’s demands and failed to cancel Claimant’s account.
Claimant also stated that Respondent was negligent In its handling of the computer
problem

http://finraawardsonline.finra.org/turing.aspx?doc=42867

TD Ameritrade Lawsuit _Keener Vs TD Ameritrade _Improper order execution and fraud

The complaint charges Ameritrade, Knight and certain key officers and directors with mutiple violations of SEC Rules 3b, 10b and 11Ac. Ameritrade violated Rule 11Ac in that they failed to disclose to their customers their true affiliation with Knight, the true level of customer order flow routed to Knight for execution and the true payments for order flow received from Knight. Knight violated Rules 11Ac regarding order handling and display in connection with the orders placed via Ameritrade’s customers. Both companies filed false historical data in required SEC filings and reports. All defendants violated Rules 10b and 3a in a scheme to defraud Ameritrade’s customers through improper order execution by not properly revealing the true affiliation shared between the parties as complained of in this action.

Plaintiffs allege that approximately 70 percent of all customers’ orders were routed to Knight for execution during the 8 1/2 year Class Period. This resulted in improper order handling and execution of nearly 40,000 trades per day on all securities on all major exchanges. The amount defrauded of the 3 million plus Class members in this action resulted in losses of billions of dollars of investment capital. The lawsuit seeks $4.5 billion in restitution, or $1500 per member.

Ameritrade failed their fiduciary responsibility to disclose the affiliation shared with Knight to their customers, the regulatory agencies and the investing public. Ameritrade’s ownership position of Knight common stock, revenues received for payment for order flow and past equity income gains from Roundtable Partners LLC obligates Ameritrade to properly disclose all levels of this affiliation to the public. By not disclosing this affiliation, and Knight’s willful violations of SEC Rules, as sanctioned by the SEC and the NASD, the Class Members have sustained the damages complained of herein.

http://www.globenewswire.com/newsroom/news.html?d=47012

TD Ameritrade Lawsuit _KINGSTON III v. AMERITRADE INC_System Failures

In January 1998 the Kingstons opened a cash stock brokerage account with Ameritrade, Inc., an on-line brokerage firm.   The booklet provided with the application packet promised the ability to access one’s on-line account at any time.   William Kingston signed the application form on December 30, 1997, and Virginia Kingston signed the same application on January 4, 1998.   The Kingstons began to utilize their account to trade stocks over the Internet.   Based on the allegations in Kingstons’ amended complaint, because of failures with the Ameritrade system on November 30, 1998, the Kingstons were unable to place an order to sell certain stocks.   The Kingstons contend that, as a result of the inability to sell their stock, they lost $32,652.87 in profits, which further caused William Kingston severe emotional distress, mental pain, and anxiety.

¶ 4 The Kingstons filed suit against Ameritrade, Inc., on March 24, 1999, seeking compensation for lost investment income, and the emotional distress, mental pain, and anxiety suffered by William Kingston.   On April 28, 1999, Ameritrade filed a Combined Motion to Compel Arbitration and Dismiss.   Both parties subsequently filed briefs and affidavits relative to the combined motions.

http://caselaw.findlaw.com/mt-supreme-court/1023723.html

TD Ameritrade Lawsuit _SHELDON SILVERSTEIN Vs Td Ameritrade _ Deceptive Marketing and Fraud

Defendants deceptively marketed ARS as cash alternatives to money
market funds for investors needing liquidity and utterly failed to disclose material
information about the ARS they were marketing.
4. Defendants uniformly failed to disclose that ARS are not cash alternatives
to money market funds but are instead complicated financial products based on bonds
having maturities of 30 years and longer. Defendants also failed to disclose that ARS
were only “liquid because certain other broker-dealers created an artificial market for
ARS which would dry up as soon as these broker-dealers decided to remove themselves
from the auction process. Defendants also failed to disclose that during the Class Period
certain broker-dealers purchased ARS for their own accounts to avert auction failures,
and that, but for the interaction of these broker dealers’ intervention a great deal of these
auctions would have failed.
5. Instead of disclosing the true nature of ARS and the substantial liquidity
risks associated with them, Defendants continued to push as many ARS as possible on to
their unsuspecting customers.

http://securities.stanford.edu/1039/AMTD_01/2008417_o01c_Silverstein.pdf

TD Ameritrade Lawsuit_ Telco Group Vs Ameritrade _Ameritrade accused of delaying orders

US discount broker Ameritrade has been accused of costing investors millions by delaying orders to buy and sell stock on its online trading system, according to an Associated Press report.

According to the report, a class action lawsuit has been filed in the US District Court by New York telecoms firm Telco Group on behalf of all Ameritrade customers since April 2000. The lawsuit alleges that the Ameritrade system, in one instance, took more than an hour to execute a trade, costing an investor more than $26,000.

Max Folkenflik, lawyer for Telco Group, claims that some trades “were delayed by hours”. He says Ameritrade had advertised that the average time to execute all trades from August 2003 to January 2004 was less than three seconds, according to the AP report.

The AP says an example listed in the lawsuit shows that Telco placed an order to buy 175,000 shares on the Nasdaq Stock Market on 7 January 2004. The high price when the trade order was received was $37.54 per share, while the low price was $37.53. The transaction was received at approximately 3:05 pm but was not executed until 4:20 pm, when the shares were trading at $37.68 per share. As a result of the trade not being executed promptly and at the best possible price, Telco lost $26,250.

Ameritrade has so far declined comment on the lawsuit.

According to the AP report, another class-action lawsuit against Ameritrade is pending. The suit was filed by four Ameritrade customers who claim glitches in the firm’s online trading platform were caused by antiquated and inadequate systems and an insufficient number of employees to help customers.

http://www.finextra.com/news/fullstory.aspx?newsitemid=14097

TD Ameritrade Lawsuit _ ZANNINI v. AMERITRADE HOLDING CORP _ Execution Trade Delay

In paragraph 1 of the “Nature of the Action” section, appellants allege that they seek to recover damages caused by Ameritrade’s violations of Nebraska’s Consumer Protection Act and the common law.   In paragraph 3 of the “Nature of the Action” section, appellants allege generally that Ameritrade’s system was “overburdened, causing frequent inability to place trades and substantial delays in the placement and execution of trades.”   In paragraph 25 of the “Substantive Allegations” section, appellants allege that they entered into a contract with Ameritrade.

In paragraph 28 of the “Substantive Allegations” section, appellants allege, inter alia, that during the class period they

encountered difficulties in placing trade orders via the internet[, that] the automated telephone trade services were not available[, and that] delays occurred when [they tried] to reach brokers.  [Appellants] also experienced significant  lag times as a result of Ameritrade’s untimely execution of orders․

Appellants allege that this delay resulted from an aggressive and successful marketing campaign in which Ameritrade’s subscriber base increased dramatically and that Ameritrade’s systems were unable to handle this growth.   According to paragraph 41 of the “Substantive Allegations” section,

The delays associated with placing and executing trades were the result of [Ameritrade's] emphasis on marketing and sales to increase the subscribership.   Meanwhile, [Ameritrade was] neglecting Ameritrade’s systems and existing subscribers because the systems could not handle the additional volume.   [Ameritrade] at all relevant times knew of the problems and failed to adequately remedy the difficulties, warn subscribers of the difficulties, or adequately provide subscribers with the means by which to avoid such problems.

In paragraph 45 of the “Substantive Allegations” section, appellants allege that they have been “consistently unable to utilize Ameritrade’s [s]ervices as a result of [Ameritrade's] over-marketing and failure to maintain adequate systems.”   Paragraph 45 contains four subsections in which it is alleged that each of the four named plaintiffs suffered financial loss with respect to particular trading orders identified therein.

Read the whole case here   http://caselaw.findlaw.com/ne-supreme-court/1308609.html

TD Ameritrade Lawsuit _ Gurfein v. Ameritrade _ False Realtime Quotes

Plaintiff Hadassah Gurfein is a private investor who maintained an account with Ameritrade. On December 6, 2002 Gurfein attempted to sell Forest Labs options contracts through Ameritrade. At 8:53:34 A.M. (CST) Gurfein placed an order to sell 50 Forest Labs December 100 put contracts at $7.70. The “bid” price displayed on Gurfein’s monitor at the time she prepared to place her order was $7.70, but increased to $7.80 as she placed her sell order. By 8:56:21 A.M. the order had not been executed, and Gurfein cancelled it. She attempted several more times to sell her puts, each time offering a price at or below the electronically displayed bid, and each time the order was not executed instantaneously and was cancelled by Gurfein. In order to “salvage a rapidly decreasing unrealized gain,” Gurfein exercised her 50 Forest Labs December 100 put contracts by purchasing 5,000 common shares of Forest Labs, which she then immediately sold for an overall profit of approximately $20,500. Amended Cmplt. ¶ 110. Gurfein alleges that she suffered a loss of approximately $13,500, the difference 420*420 between the profit she would have realized if her first trade had been executed at $7.70 ($34,000) and the $20,500 profit she actually obtained.

The same day, Gurfein tried to sell 100 Forest Labs February 85 puts through Ameritrade. She submitted an order to sell all 100 contracts at $4.50, a price below the electronically displayed bid. Only 25 of the contracts were sold, and at a price of only $3.00. The remaining 75 contracts were subject to a 2-for-1 split in January 2003 and ultimately sold at a price of $.20 each, for a total of $3,000. Gurfein alleges a total loss of $34,500 on this transaction, reflecting the difference between what she would have made if all 100 options had been sold at $4.50 ($45,000) and the $10,500 she actually made. Gurfein attributed the quotations on her computer throughout her December 6th trading activity to both “defendant Knight”^[4] and Ameritrade.

Gurfein claims that those transactions, coupled with the findings in the OCIE Report, show repeated misrepresentations and a scheme by defendants to defraud the options market through illegal trading. She alleges that defendants materially misrepresented both bid and ask quotations, and that orders placed by direct access customers would be executed instantaneously. As part of the scheme (1) Ameritrade intentionally routed its customers’ orders to Knight, and defendants (2) refused to execute direct access orders at the quoted prices, (3) discriminated against direct access customers by not executing their orders, or executing them at less favorable prices than those given to preferred customers, (4) changed or “faded” options quotations after plaintiff clicked on them, and (5) the AMEX ignored the violations and allowed the scheme to continue. As a result, defendants reaped profits, while plaintiff lost profits and suffered losses. Amended Cmplt. ¶¶ 112 and 123.c.

For Read the Whole Article – Click Below

http://scholar.google.com/scholar_case?case=15133521099468807599&hl=en&as_sdt=2&as_vis=1&oi=scholarr

TD Ameritrade Lawsuit _ GREEN v. AMERITRADE INC _ Lagging Real Time Quotes

Mitchell Green subscribed to Ameritrade’s real-time quote service in February 1998.   In March 2000, Green sued Ameritrade in the Douglas County, Nebraska, district court.   Green sought to bring the suit as a class action on behalf of “[a]ll persons classified as Nonprofessional subscribers who have paid $20 per month for real time ‘last sales information’ with defendants Ameritrade, Inc. and Ameritrade Holding Corp. to obtain last sales information or real time market quotes for stocks or options.”   Class Action Petition ¶ 3.³ Green alleged in his complaint that Ameritrade did “not provide its real time quote subscribers with actual real time, last sales information with respect to ‘option’ quotes.”   Class Action Petition ¶ 12.   Green asserted that the actual quotes provided lagged “up to hours behind the actual last sale of a particular option on any and all exchanges.”  Id. He further alleged that Ameritrade led subscribers to believe that the option quotes were obtained from all option exchanges and market makers, though in fact they were not so obtained.   Finally, and significantly, Green’s complaint alleged that real-time quote service subscribers “are making investment decisions to purchase or sell options based upon stale last sale information.”  Id. Upon these facts, Green brought state-law claims for breach of contract, fraud by intentional misrepresentation, fraud by negligent representation, deceptive trade practices, and violation of the Nebraska Consumer Protection Act.

http://caselaw.findlaw.com/us-8th-circuit/1233144.html

Steve Jobs, dead at 56, had a rare form of pancreatic cancer – Video

Steve Jobs’ 2005 Stanford Commencement Address

By Amina Khan and Jeannine Stein, Los Angeles Times / For the Booster Shots BlogOctober 5, 2011, 6:21 p.m.

Apple co-founder Steve Jobs, who passed away today at the age of 56, had a rare form of pancreatic cancer called pancreatic neuroendocrine cancer, which produces islet cell or neuroendocrine tumors.This form is usually less aggressive than pancreatic exocrine cancer and patients can live longer, with the average survival rate more than three years. Some people with the neuroendocrine form can live as long as 20 years.Several forms of treatment are available. Jobs was diagnosed in 2003, had a liver transplant in 2009 and took an extended medical leave from Apple last January.During his public appearances before he retired as Apple’s CEO in August, it was evident Jobs had lost a significant amount of weight.“Weight loss when it comes to advanced cancer is never a good thing,” said Dr. Jack Jacoub, a medical oncologist at MemorialCare Cancer Institute at Orange Coast Memorial Medical Center in Fountain Valley. Keeping body weight up and healthy while fighting the disease is key, he added. “We use 10% weight loss as being a negative prognosticator.”There’s a propensity for the disease to spread from thepancreas to the liver, Jacoub said — which is why many local treatments focus on attacking cancer cells in the liver, including destroying them with heat or surgically removing them.In some cases, removing a diseased liver entirely and replacing it with a donor liver is an option — but liver transplants aren’t that common among people with this type of pancreatic cancer, Dr. Craig Devoe said in August. Devoe is an an oncologist at the North Shore-LIJ Health System in New Hyde Park, N.Y., who specializes in pancreatic cancer. But a transplant can be done when other options have run out or when the disease has spread to the liver. It’s not typically thought of as a cure.

Even after a liver transplant, the cancer can recur, Jacoub said, which may have been what happened in Jobs’ case. “Probably nine out of 10 times it’s the recurrence of the cancer, but it’s also possible that he suffered from the toxicity of the drugs that he was taking,” Jacoub said. Infections can also occur because the drugs keeping the body from rejecting the liver transplant suppress the immune system.

Neuroendocrine tumors can grow slowly; ones that are functional can secrete hormones and cause symptoms such as stomach ulcers, high blood sugar or skin rashes. Nonfunctioning tumors can grow without being noticed, and they don’t produce hormones or symptoms.

The disease is sometimes treated like a condition, much like diabetes. Therapies include medication and low-toxic oral chemotherapy. Two drugs, Sutent and Afinitor,  were shown in two 2011 New England Journal of Medicine studies to slow the progression of tumors. Peptide receptorradiotherapy is another form of treatment in which peptides radiate neuroendocrine tumor cell receptors.

Jobs, Jacoub said, likely had many resources available to fight the cancer, and there was little that could have been done differently. Living in the public eye, Jobs dealt with the disease “in such a graceful way — you’d be hard pressed to find another person that did it on his terms,” Jacoub said.

TD Ameritrade Fires VP and COO David Kelley

I lost $120,000 because TD Ameritrade deliberately supplied lagging quotes . My quotes lagged for many more months even after I told them about it . Eventually, they shut my account down instead of fixing the quotes issue .

Dave Kelley formerly TD Ameritrade COO and now Next IT Board Member  and his staff including Jeff Plummer (TD Ameritrade Compliance Manager) refused to honor their company policy and instead decided to play games by not replying my letters and never referencing the interview on dow Jones .Somehow somebody went all over the internet and made a lot of effort removing an interview he did with Brett Philbin of Dow Jones . The entire article was removed from the Wall Street Journal and other sites . They even went as far as removing the article from Google Cache . I just could not believe that a compliance department and a COO Dave Kelly that made $2 million a year would play these games but today Dave Kelley has been fired !

Here is an example of the kind of BS Traders have to deal with http://dearameritrade.wordpress.com/streamer-issues-plus/

See .. David Kelley $4 Million Severance package – http://biz.yahoo.com/e/110211/amtd8-k.html

See .. Sec Filing showing David Kelley Termination – http://www.amtd.com/investors/secfiling.cfm?filingID=950123-11-4313&CIK=1173431

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

NEW YORK (Dow Jones)–TD Ameritrade Holding Corp. (AMTD) said the employment of David Kelley, its chief operating officer, was terminated, according to a regulatory filing.

In a filing with the Securities and Exchange Commission, the Omaha, Neb., online brokerage said the move took place Thursday and will be effective as of Jan 28.

Kelley joined TD Ameritrade in June 2006 as senior vice president of the company’s retail investor group and was appointed to the chief operating officer position in October 2008, according to the online brokerage’s website. Previously, he spent 19 years at Merrill Lynch.

A TD Ameritrade spokeswoman confirmed that Kelley had left the company and said it will be conducting a search for his replacement that includes both internal and external candidates.

“We have a deep bench of senior leadership and will be relying on them in the interim,” she said.

A call placed to Kelley through his assistant wasn’t immediately returned.

At TD Ameritrade, Kelley oversaw operations and technology, including back-office support for the company’s retail client service, and the company’s institutional and clearing business units, the website said.

Last summer and late in the fall, the online brokerage dealt with several technology problems that affected clients’ ability to make trades and load historical price charts. While the first set of disruptions affected the legacy TD Ameritrade platform, clients using its newer thinkorswim trading platform also ran into problems in August and November.

In an interview in June, Kelley told Dow Jones Newswires three technology problems at the company were “completely unrelated” events, saying that TD Ameritrade had to “take some responsibility” for website, server, and streaming-quote issues, adding the firm would compensate affected investors as needed.

TD Ameritrade wouldn’t comment on whether the technology problems were a factor in Kelley’s departure.

TD Ameritrade purchased options brokerage thinkorswim more than a year ago to advance its trading technology and boost its presence in the active-trader market.

Earlier this week, TD Ameritrade said its fiscal first-quarter profit rose 6.5% as an increase in asset-based revenue offset a slight drop in trading activity.

Shares of TD Ameritrade were down 0.2% at $20.45 in recent trading; they are up about 10% over the past 52 weeks.

-By Brett Philbin, Dow Jones Newswires; 212-416-2173; brett.philbin@dowjones.com

By BRETT PHILBIN

See Link to Full Article on WSJ Site below

http://online.wsj.com/article/BT-CO-20110121-709085.html

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

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

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

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