Is this broker liable??

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Old Feb 2, 2008, 8:19am   #1
 
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Is this broker liable??

I've been with a broker for several years without any problems. A few months ago the broker introduced a new computerised trading platform which resulted in my account becoming botched up. Several shares appeared in my account which I then mistakenly sold. The broker later corrected the account by buying the sold shares back from the market. As the prices of the shares had gone down, this left me owing the broker a sum of money. What is my position???
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Old Feb 2, 2008, 8:23am   #2
 
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Originally Posted by gatecrasher View Post
I've been with a broker for several years without any problems. A few months ago the broker introduced a new computerised trading platform which resulted in my account becoming botched up. Several shares appeared in my account which I then mistakenly sold. The broker later corrected the account by buying the sold shares back from the market. As the prices of the shares had gone down, this left me owing the broker a sum of money. What is my position???
You mistakenly sold several shares that you didn't buy and weren't yours. What did you do with the money?
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Old Feb 2, 2008, 8:55am   #3
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You're liable because the broker will successfully argue that a client must always know his position and if there's a problem report it to the back office.

Are you sure you didn't do what many do, see a position in their account which they know is not theirs, think it's 'free money' etc.
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Old Feb 2, 2008, 4:16pm   #4
 
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Sorry, it's on you. Whenever you see something unexpected in your account, your job is to call your broker immediately before taking any action.

jj
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Old Feb 2, 2008, 9:12pm   #5
 
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Originally Posted by gatecrasher View Post
I've been with a broker for several years without any problems. A few months ago the broker introduced a new computerised trading platform which resulted in my account becoming botched up. Several shares appeared in my account which I then mistakenly sold. The broker later corrected the account by buying the sold shares back from the market. As the prices of the shares had gone down, this left me owing the broker a sum of money. What is my position???
It does not make a lot of sense. Maybe that is not the full story. Depending on the prices these shares were bought before you sold them you may have made money for those transactions depending again on what price the broker bought them back. You owe commissions for sure but they may owe you money if you sold at a better price than the day they discovered the error. The difference should be split if it is positive but you may be liable for any negative balance.

You ought to take a very close look at the transaction and request the broker to send you the full details.

You can also ague of illegal PARKING of shares in your account and threaten of a lawsuit. Parking of shares is illegal. You better consult an attorney that specialized in these issues.

Alex
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