Zecco Fiasco.

[BenRogers]

Anyone has any idea as to what's going on with Zecco?
I am so ready to sue these people.

[Richard Barsom]

I am so mad at these guys you have no idea. I am going to my lawyers
today and will keep you posted.

On Tue, Apr 7, 2009 at 10:21 AM, BenRogers <qhasa...@yahoo.com> wrote:
>
> Anyone has any idea as to what's going on with Zecco?
> I am so ready to sue these people.
> >
>

--
Richard E. Barsom Sr.

[rab...@gmail.com]

Here is the email from Zecco after first complain email.

Dear Client,

Thank you for contacting Zecco Trading. In response to your e-mail you
received a Money Due call since you currently have a cash account. We
do apologize for the glitch in the system on 4/1, we do understand
that your Buying Power was increased, unfortunately it is a self
brokered account and you are responsible for knowing how much cash is
available on your account at all time.. So in result of you using more
than what you had available it did generate a Money due call on your
account that you are responsible for.



Should you need any further assistance please contact us at
877-700-7862.



Best Regards,



Nishka

Financial Services Representative

On Apr 7, 11:18 am, Richard Barsom <rbar...@gmail.com> wrote:
> I am so mad at these guys you have no idea. I am going to my lawyers
> today and will keep you posted.
>

[rab...@gmail.com]

Here is the second email after another email to them.

Thank you for contacting Zecco trading. We have forward your email
onto our resource department for further research and review. Please
allow approximately 3-5 business days for the processing of your
request. If you have any further questions or concerns, please feel
free to give us a call at 877-700-7862 Monday to Friday 6:00 am to
3:00 pm pacific standard time. Thank you and have a great day!



We hope this information was helpful. If you have further concerns or
inquiries, please feel free to contact us!



Zecco Team Member,



Devin

[Richard Barsom]

I am seeing an lawyer today keep you posted. BTW I am supossed be
called back they never did. Some manager called Austin nice guy seemed
to know they were in trouble. The first guy I spoked referred to
incident as an April fools joke. After I assured him that it was not
funny and that I tape all my conversations he put his manager on the
phone.

[Christina]

Hello,
Thank you for starting this group. I am new to Zecco, and equally new
to stock trading. As you all know, we woke up on the morning of April
1st with an exorbitant number in our accounts. I waited a few hours
thinking that this was surely an error, but when it didn't change (and
when there was still no warning posted on their site), I thought let
me test this and buy some stocks and immediately sell. Which I did - I
bought approximately $14,000 worth of stocks, sold when it was up $70.
The money was immediately replenished after that sell, and I didn't
touch my account again. By the end of the day, it seemed the issue had
resolved itself. However, a margin call has been issued on my account
(I have a cash account by the way), and while my buying power is
reflecting a positive balance, I get a message saying "Only orders
that liquidate positions are allowed."

If they plan to liquidate my account, it doesn't seem right since the
money was immediately repaid, and if anything, I might just owe zecco
that $70 profit.

I have filed a complaint with the SEC online. I also emailed Zecco
customer service multiple times, and continue to get vague answers,
like "Thank you for contacting Zecco Trading. Your account is
restricted due to trade related issues that occurred on April 1,
2009. "Liquidate" means that you may not trade on the account. I
hope this information was helpful. If you have further questions or
concerns please contact Customer Service at 877-700-7862 or you may
contact us at 626-529-7100."

[Andrew Mo (localandbitter)]

Hi Christina,

Did you open a regular "cash" account, or did you open a "margin" account and sign a margin account agreement with Zecco / Penson Financial?

[Christina]

I opened a regular cash account. I do NOT have a margin account, and
never signed up for one.

On Apr 7, 12:47 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> Hi Christina,
> Did you open a regular "cash" account, or did you open a "margin" account
> and sign a margin account agreement with Zecco / Penson Financial?
>

[Andrew Mo (localandbitter)]

I would expect that customers with Cash accounts should have a much easier time making a case against Zecco on this issue.

[Christina]

Thank you for that encouragement. I am hoping that you all will lead
the way on this. I finished grad school two years ago and have been
struggling with the debt since. Right when I joined Zecco was the
moment I decided that I needed to start planning for the future and
try to grow what little resources I have. I am afraid that they will
take what I have, and I have no idea about 1)The Securities and
Exchange world in general and 2)What my rights are in this situation.
I hope that we can really gather all the information that is shared
here and do something valuable with it. While I can't offer much in
the way of lawerly advice or resources for a case, I am happy to
support this group in any way I am capable of - research, etc.

On Apr 7, 1:00 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> I would expect that customers with Cash accounts should have a much easier
> time making a case against Zecco on this issue.
>

[Andrew Mo (localandbitter)]

For all of you and future group members, I recommend you look up your state's laws.

I will reiterate that Zecco Trading, Inc. is subject to the state laws of California in addition to the laws of your state...

[Christina]

Another message from Zecco:

Thank you for contacting Zecco Trading. Please allow us time to
resolve this issue. If you do not hear anything from us by next week,
please let us know. Thank you for your patience.

It doesn't seem right that they can lock up my account for a week,
especially when we have no idea whether my information and money is
safe or not.

On Apr 7, 1:12 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> For all of you and future group members, I recommend you look up your
> state's laws.
> I will reiterate that Zecco Trading, Inc. is subject to the state laws of
> California in addition to the laws of your state...
>

[Qua$ar]

Here are some tips:

http://www.securitiesfraud.org/stock_broker_law.htm

[amitra]

I have captured numerous screenshots when that happened. Please let me
know if someone needs them for proof.
Since that fiasco my Cash account is showing negative buying power. I
wish I had never opened an account with them.

[Christina]

I'm wondering if anyone has heard from a lawyer yet, what kind of
advice they have offered thus far. I received a notice this morning
that my account is going to be liquidated if I do not answer the
margin call, which I still haven't gotten a straight answer from the
representatives as to whether the margin call is real or not.

[Andrew Mo (localandbitter)]

Zecco Trading, Inc. is registered with FINRA.

FINRA has a list of prohibited conduct for brokers here:

http://www.finra.org/Investors/ProtectYourself/BeforeYouInvest/ProhibitedConduct/p085674

Take a look at items 2, 5 and 13 -- Especially for those of you with cash ("non-margin") accounts.

Zecco Trading's "CRD" number is (135398)

FINRA Investor Complaint Page:

https://apps.finra.org/Investor_Information/Complaints/complaintCenter.asp

SEC Investor Complaint Page:

http://sec.gov/complaint.shtml

California Department of Corporations:

http://www.corp.ca.gov/about/complaint.asp

NYSE Complaint Page:

http://www.nyse.com/regulation/complaintsinquiries/1088808969148.html

[Andrew]

Other things to think about...

Zecco Trading recently issued a statement that the problem is due to
one of their vendors and a data feed it provided.

A questions that should be asked:
Who are Zecco's vendors, and which ones hold or manage account
information, balances, etc for Zecco?

The answer to this question should be Penson Financial Services, Inc.,
Zecco's clearing firm.

Many other "introducing brokers" use Penson for clearing -- Why was
this April 1st buying-power issue isolated to Zecco?

[Andrew]

Anyone have updates to provide ?

[Qua$ar]

I got a call from customer service a couple of days ago saying:

"It's your fault, we don't care, we don't care, it's your fault"

now my Cash account is at negative balance, and supposedly I have to
meet a "margin call"

[Qua$ar]

I wonder what's gonna happen next?

On Apr 14, 12:48 pm, Andrew <localandbit...@gmail.com> wrote:

[Christina Bottego]

Same thing with me - they closed my account. I switched to Scottrade. No updates otherwise.

[Andrew Mo (localandbitter)]

Here's an interesting excerpt from the FINRA Manual for members:

(http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=5504)

Rule 2010. Standards of Commercial Honor and Principles of Trade

"A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade."

[Evan Damiano]

They've been ignoring me, haven't called me, account is still locked. I'm so angry...

[pulse]

They have locked my account from making new trades, I have a positive
cash balance and they are answering all emails with impersonalised and
irrelevant replies. I never made trades that I could not cover and
let them know this from day 1.

Please be aware that Zecco are going through your account records and
manipulating the trade log to remove any gains they can. You will
notice this through a false buy or sell order dated at a time of
unmatching market values. I imagine they are fixing the log for their
own case so please be warned that everyone should keep record of their
own accounts before Zecco rewrite to their own version of what
happened.

On Apr 14, 7:25 pm, Evan Damiano <e.dami...@gmail.com> wrote:
> They've been ignoring me, haven't called me, account is still locked. I'm so
> angry...
>
> On Tue, Apr 14, 2009 at 2:24 PM, Andrew Mo (localandbitter) <
>

> localandbit...@gmail.com> wrote:
> > Here's an interesting excerpt from the FINRA Manual for members: (

> >http://finra.complinet.com/en/display/display_main.html?rbid=2403&ele...)<http://finra.complinet.com/en/display/display_main.html?rbid=2403&ele...>

>
> > Rule 2010. Standards of Commercial Honor and Principles of Trade
>
> > "A member, in the conduct of its business, shall observe high standards of
> > commercial honor and just and equitable principles of trade."
>

> > On Tue, Apr 14, 2009 at 10:53 AM, Christina Bottego <cbott...@gmail.com>wrote:
>
> >> Same thing with me - they closed my account. I switched to Scottrade. No
> >> updates otherwise.
>

[Andrew Mo (localandbitter)]

(Disclaimer: This is not legal advice)

It may be a good idea for you to log into your account and download the transaction confirmation statements for those dates and your account statements. Save extra copies.

You can do this by logging into the Zecco Trading page and clicking on the left menu item that says "Account Records." From there, go to "Account Statements." Download all the confirmation notices and make sure the trades listed on those days reflect orders you actually placed.

[Christina Bottego]

This is interesting - I just got a response from Zecco in regards to the complaint I filed with Zecco. Some of the information in that letter is false, including that "On April 1, prior to market open, Zeccon Trading posted a notification on its website indicating that buying power figures were incorrect." If I'm not mistaken, that message was NOT there until sometime around or after noon EST, hence all the confusion. Does anyone recall the message being up BEFORE market open? I responded to the SEC saying that I think some of their response is false, and asking how I should proceed. Thoughts on this?

[Qua$ar]

I wonder what happens the "margin call" is never met? any ideas?

On Apr 14, 5:01 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> (Disclaimer: This is not legal advice)
>
> It may be a good idea for you to log into your account and download the
> transaction confirmation statements for those dates and your account
> statements. Save extra copies.
> You can do this by logging into the Zecco Trading page and clicking on the
> left menu item that says "Account Records." From there, go to "Account
> Statements." Download all the confirmation notices and make sure the trades
> listed on those days reflect orders you actually placed.
>

[Andrew Mo (localandbitter)]

(Disclaimer: this is not legal advice)

Qua$ar,

I would presume that they would liquidate any holdings in your account in an attempt to cover the margin call. Then they would probably lock your account and try to obtain the remainder through a collections agency...

[Qua$ar]

I never saw the notification, it was never there, until they posted on
the forums about a couple of hours later after a lot of customers were
already affected.

On Apr 14, 9:16 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> (Disclaimer: this is not legal advice)
>
> Qua$ar,
> I would presume that they would liquidate any holdings in your account in an
> attempt to cover the margin call. Then they would probably lock your account
> and try to obtain the remainder through a collections agency...
>

[Qua$ar]

I'm afraid what it says on the Account Agreement supplement might
happen, what do you think?:

"8. Duty to Promptly Pay All Account Obligations. You have a duty to
Zecco Trading to pay for all trades, debit balances, margin calls or
other obligations owing in your account, and must pay any Account
balance owed to Zecco Trading on demand. You have a duty to pay all
applicable fees, commissions, taxes and other charges associated with
your account may change without notice, and you will be bound by such
changes. If any Account carries a negative balance, you must pay a
reasonable rate of interest determined by Zecco Trading on principal
amount. If you fail to make a payment on time, you must pay a
reasonable late fee determined by Zecco Trading."

On Apr 14, 9:16 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> (Disclaimer: this is not legal advice)
>
> Qua$ar,
> I would presume that they would liquidate any holdings in your account in an
> attempt to cover the margin call. Then they would probably lock your account
> and try to obtain the remainder through a collections agency...
>

[Andrew Mo (localandbitter)]

Qua$ar,

What portion of the statement? The interest on principal?

How did the negative balance come about? Was this from a loss resulting from an April 1 trade?

[Qua$ar]

Yes, they executed the trades on April 1st and liquidated the
securities with a loss the next day.

On Apr 14, 11:08 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> Qua$ar,
> What portion of the statement? The interest on principal?
>
> How did the negative balance come about? Was this from a loss resulting from
> an April 1 trade?
>

[Qua$ar]

On the Trading Account Agreement supplement, the part that says:

"Your Affirmative Duties and Responsibilities"

[Andrew Mo (localandbitter)]

(Disclaimer: this is not legal advice)

Qua$ar,

It sounds like Zecco would begin charging interest on the negative balance if the margin call was not paid.

Whether or not the customer is liable for the balance and interest is another issue. If the customer is not responsible for the loss creating the negative balance, margin call and associated interest, one would presume the customer is not responsible for paying.

[Cole Dutcher]

Zecco doctored my account, too.  They have me selling stocks at times that I didn't own them.  It not only is patently false; it doesn't make sense.
Cole

[Evan Damiano]

I just talked to Chad, one of the customer service managers. They are literally taking people's gains and putting it in a slush fund until they figure out what to do with it. He atleast was a nice guy, suggested sending a letter to Joe Chung at their compliance department, which I will do. If that doesn't work out I'm going to take them to arbitration

[Christina Bottego]

It would be helpful if we can do this as a class action as some of us don't have the resources for a lawyer. Please keep us in the loop

[Evan Damiano]

You don't need a lawyer for arbitration. I'm going to email their compliance guy and I'll post his response


Evan

[Andrew Mo (localandbitter)]

Even though a lawyer is not required for arbitration -- The system is inherently stacked against the investor bringing a claim. The defendant (respondents) to your claim will likely have lawyers working on their behalf.

[Andrew Mo (localandbitter)]

It looks like Zecco took down the forum and all posts associated with the April 1 issue.

[Cole Dutcher]

My account has sells that undo all of my buys and the other way around.  If I bought 1,000 shares at 10:37 at $1.00 then, it says that I also sold 1,000 shares at 10:37 at ~$1.00.  So I just talked to Mishka at Zecco; she was friendly. She said that those original trades "busted" when I couldn't pay the initial margin call and were undone by Zecco after the fact.  If I pay my total extended margin call within the 90 day period then I will get to keep my profit.  However, since the trades were already "undone", that profit would just come out of Zecco's pocket.  This is what i was told over the phone.
Cole

[Christina Bottego]

I just don't understand why each case is getting treated differently. I would like to know how they are deciding on some cases vs. others.

[Evan Damiano]

That's definitely not correct. Was she a manager or just a customer service peon? When you sell shares that is a legally binding contract, you can't "undo" it days later. I woudln't be very happy if I found out 3 days after buying shares they got yanked back. You can get a good faith violation but Zecco def just took that money and moved it to another account that is under their supervision. Chad, the guy I talked to, confirmed this upon my questioning.

On Wed, Apr 15, 2009 at 3:31 PM, Cole Dutcher <coled...@gmail.com> wrote:

[Evan Damiano]

ok guys,


got a response from their compliance department. They completely admit in writing that they have the money in their possession and are keeping it, based on my behavior, in their opinion, being "unethical". Apparently business has found a new sense of ethics...

What we need to show is that someone who lost money is stuck having to pay it. If we have that correspondence, and combine it with their response to me, they are F'ed. Anyone have such a response from them?

[Andrew]

(Disclaimer: this is not legal advice)

Evan,

If the trades were really "broken up," I believe this would have
required a break-up facilitated by the exchange. And if it were true,
this would have a document trail.

Check out FINRA/NASD Rule 2210 and 2211, regarding Communications with
the Public, including "Correspondence"
http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=3617

Are they flat out lying to customers?

On Apr 15, 12:46 pm, Evan Damiano <e.dami...@gmail.com> wrote:
> That's definitely not correct. Was she a manager or just a customer service
> peon? When you sell shares that is a legally binding contract, you can't
> "undo" it days later. I woudln't be very happy if I found out 3 days after
> buying shares they got yanked back. You can get a good faith violation but
> Zecco def just took that money and moved it to another account that is under
> their supervision. Chad, the guy I talked to, confirmed this upon my
> questioning.
>

> On Wed, Apr 15, 2009 at 3:31 PM, Cole Dutcher <coledutc...@gmail.com> wrote:
> > My account has sells that undo all of my buys and the other way around.  If
> > I bought 1,000 shares at 10:37 at $1.00 then, it says that I also sold 1,000
> > shares at 10:37 at ~$1.00.  So I just talked to Mishka at Zecco; she was
> > friendly. She said that those original trades "busted" when I couldn't pay
> > the initial margin call and were undone by Zecco after the fact.  If I pay
> > my total extended margin call within the 90 day period then I will get to
> > keep my profit.  However, since the trades were already "undone", that
> > profit would just come out of Zecco's pocket.  This is what i was told over
> > the phone.
> > Cole
>
> > On Wed, Apr 15, 2009 at 3:24 PM, Andrew Mo (localandbitter) <
> > localandbit...@gmail.com> wrote:
>
> >> It looks like Zecco took down the forum and all posts associated with the
> >> April 1 issue.
>
> >> On Wed, Apr 15, 2009 at 10:14 AM, Andrew Mo (localandbitter) <
> >> localandbit...@gmail.com> wrote:
>
> >>> Even though a lawyer is not required for arbitration -- The system is
> >>> inherently stacked against the investor bringing a claim. The defendant
> >>> (respondents) to your claim will likely have lawyers working on their
> >>> behalf.
>

> >>> On Wed, Apr 15, 2009 at 9:06 AM, Evan Damiano <e.dami...@gmail.com>wrote:
>
> >>>> You don't need a lawyer for arbitration. I'm going to email their
> >>>> compliance guy and I'll post his response
>
> >>>> Evan
>
> >>>>   On Wed, Apr 15, 2009 at 12:04 PM, Christina Bottego <

> >>>> cbott...@gmail.com> wrote:
>
> >>>>> It would be helpful if we can do this as a class action as some of us
> >>>>> don't have the resources for a lawyer. Please keep us in the loop
>

> >>>>> On Wed, Apr 15, 2009 at 12:03 PM, Evan Damiano <e.dami...@gmail.com>wrote:
>
> >>>>>> I just talked to Chad, one of the customer service managers. They are
> >>>>>> literally taking people's gains and putting it in a slush fund until they
> >>>>>> figure out what to do with it. He atleast was a nice guy, suggested sending
> >>>>>> a letter to Joe Chung at their compliance department, which I will do. If
> >>>>>> that doesn't work out I'm going to take them to arbitration
>

> >>>>>> On Wed, Apr 15, 2009 at 11:25 AM, Cole Dutcher <coledutc...@gmail.com

> >>>>>> > wrote:
>
> >>>>>>> Zecco doctored my account, too.  They have me selling stocks at times
> >>>>>>> that I didn't own them.  It not only is patently false; it doesn't make
> >>>>>>> sense.
> >>>>>>> Cole
>
> >>>>>>> On Wed, Apr 15, 2009 at 2:56 AM, Andrew Mo (localandbitter) <

> >>>>>>> localandbit...@gmail.com> wrote:
>
> >>>>>>>>  (Disclaimer: this is not legal advice)
>
> >>>>>>>> Qua$ar,

> >>>>>>>> It sounds like Zecco would begin charging interest on the negative
> >>>>>>>> balance if the margin call was not paid.
>
> >>>>>>>> Whether or not the customer is liable for the balance and interest
> >>>>>>>> is another issue. If the customer is not responsible for the loss creating
> >>>>>>>> the negative balance, margin call and associated interest, one would presume
> >>>>>>>> the customer is not responsible for paying.
>

> ...
>
> read more »

[Andrew]

The NYSE has a document on canceling erroneous trades here:
http://www.nyse.com/pdfs/Arca_Erroneous_Execution.pdf

On Apr 15, 2:34 pm, Andrew <localandbit...@gmail.com> wrote:
> (Disclaimer: this is not legal advice)
>

> Evan,
>
> If the trades were really "broken up," I believe this would have
> required a break-up facilitated by the exchange. And if it were true,
> this would have a document trail.
>
> Check out FINRA/NASD Rule 2210 and 2211, regarding Communications with

> the Public, including "Correspondence"http://finra.complinet.com/en/display/display_main.html?rbid=2403&ele...

> ...
>
> read more »

[Andrew Mo (localandbitter)]

Here's an interesting news article about a broker getting fined for not having the appropriate measures in place to stop an erroneous order. A $10.8 million order turned into a $10.8 billion order:

http://www.reuters.com/article/governmentFilingsNews/idUSN0739462720070207

[pulse]

Has anyone been able to transfer out any cash after Zecco had
confiscated their gains? Zecco are still holding my account and
ignoring my emails.

On Apr 15, 4:08 am, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> Qua$ar,
> What portion of the statement? The interest on principal?
>
> How did the negative balance come about? Was this from a loss resulting from
> an April 1 trade?
>

[Christina Bottego]

I keep getting margin call notices, even though I was told on the phone that everything was cleared up and I didn't owe anything. Further, I can no longer log in to my account to see what's going on.

[pulse]

At this stage I would not believe a word they say, get everything in
writing.

On Apr 16, 7:53 pm, Christina Bottego <cbott...@gmail.com> wrote:
> I keep getting margin call notices, even though I was told on the phone that
> everything was cleared up and I didn't owe anything. Further, I can no
> longer log in to my account to see what's going on.
>

[Andrew Mo (localandbitter)]

I have a few archived copies of the threads that were posted on the zecco forums if anyone needs them. Some of the pages were stored in my browser's cache before they took the posts down.

[Nick]

Have any of you contacted the SEC and/or heard back from them? I
contacted the SEC today after my Roth IRA account was wiped out on
April 1st. Zecco keeps telling me a different story every time im on
the phone with them. It was unbelievable to me that my trade went
through in my cash Roth IRA account, I was just curious to see if the
money was actually there or not.

On Apr 18, 6:18 pm, "Andrew Mo (localandbitter)"

> > Zecco?- Hide quoted text -
>
> - Show quoted text -

[Evan Damiano]

Wait, so did zecco make you eat your losses? This is important, let us know, because I have documentation saying that they are keeping gains and also absorbing losses. so if they wrote that to me and then made you eat your losses, we have written proof they aren't doing what they said they would and we can get some arbitration rolling

[Andrew Mo (localandbitter)]

Nick, I think I've recently read about past cases relating to a broker's trading platform that allowed orders to go through that should never have been allowed -- regardless of the user's inputs...

 

If I come across the references, I will post them.

[Qua$ar]

Zecco is making me take losses for trades that they executed on April
1st. It's still not clear to me. Can all customers affected by the
April 1st incident be part of the same arbitration? and if so, what
forms need to be filled out? how can one start an arbitration without
a lawyer?

On Apr 20, 7:14 pm, Evan Damiano <e.dami...@gmail.com> wrote:
> Wait, so did zecco make you eat your losses? This is important, let us know,
> because I have documentation saying that they are keeping gains and also
> absorbing losses. so if they wrote that to me and then made you eat your
> losses, we have written proof they aren't doing what they said they would
> and we can get some arbitration rolling
>

[Nick]

Yes I have been forced to eat my losses my account says -$606 now.
They continually tell me that I am responsible for the losses, but
from what I have read is that they are undoing trades that resulted in
gains. Something doesnt seem right. Especially since it was a Roth
IRA and a cash account.

> ...
>
> read more »- Hide quoted text -

[Evan Damiano]

email Joe Chung, their compliance officer, and get in writing that they are holding you responsible for the loss.

I have a letter from him saying they are taking my gain.

Then we have a case.

[Andrew Mo (localandbitter)]

This is the email address for the Zecco Compliance department and Joe Chung:

ZComp...@zeccotrading.com

[Qua$ar]

Thanks a lot, I just sent the e-mail and will let you know what
happens.

On Apr 21, 1:57 pm, "Andrew Mo (localandbitter)"

> ...
>
> read more »

[Nick]

I just sent an email to the Zecco compliance department requesting a
letter explaining that I am responsible for losses incurred on April
1st and 2nd due to the erroneous buying power. I will let you all
know when I get a response.

Haha, I wonder if anyone will want me to run their money after this
fiasco.

On Apr 21, 1:57 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> This is the email address for the Zecco Compliance department and Joe Chung:

> ZComplia...@zeccotrading.com

>
>
>
> On Tue, Apr 21, 2009 at 10:36 AM, Evan Damiano <e.dami...@gmail.com> wrote:
> > email Joe Chung, their compliance officer, and get in writing that they are
> > holding you responsible for the loss.
>
> > I have a letter from him saying they are taking my gain.
>
> > Then we have a case.
>

[Andrew Mo (localandbitter)]

Here's an interesting NASD rule:

3070: Reporting Requirements

(a) Each member shall promptly report to the Association whenever such member or person associated with the member: 

(2) is the subject of any written customer complaint involving allegations of theft or misappropriation of funds or securities or of forgery;

I suppose if you write a written complaint, as described above, they have to report it to FINRA... 

[Nick]

I got a response from the SEC. They recommended to use arbitration
since we probably agreed to settle any disputes using arbitration in
our contract with Zecco. Has anyone read our brokerage account
contract to confirm if we are required to use arbitration? I may look
at it later tonight.

If so we must go through www.finra.org and review the procedures for
an arbitration. What do you guys think?

On Apr 22, 12:06 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> Here's an interesting NASD rule:
> 3070: Reporting Requirements
> (a) Each member shall promptly report to the Association whenever such
> member or person associated with the member:
>
> (2) is the subject of any written customer complaint involving allegations
> of theft or misappropriation of funds or securities or of forgery;
>
> I suppose if you write a written complaint, as described above, they have to
> report it to FINRA...
>

[Evan Damiano]

absolutely...esp if we get written documentation that they are sticking you with losses on a cash account. see my response where they admit

1.) they have the money
2.) they took the money
3.) they intend to keep the money that is not theres due to their newfound moral compass

[Andrew Mo (localandbitter)]

Evan,

Did you find irony in their statement, "rewarding unethical behavior" ?

[Andrew]

Also, does it sound like they're saying the following:

For people that had losses:
A) Because you placed these trades in your account, they are your own
risk. Therefore you are responsible for the loss.

For people that had gains:
B) Because you placed these trades in your account, you put our firm
at risk. Therefore we will keep your gains.



On Apr 23, 9:38 am, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> Evan,
> Did you find irony in their statement, "rewarding unethical behavior" ?
>

> On Thu, Apr 23, 2009 at 7:34 AM, Evan Damiano <e.dami...@gmail.com> wrote:
> > absolutely...esp if we get written documentation that they are sticking you
> > with losses on a cash account. see my response where they admit
>
> > 1.) they have the money
> > 2.) they took the money
> > 3.) they intend to keep the money that is not theres due to their newfound
> > moral compass
>

> > On Thu, Apr 23, 2009 at 10:26 AM, Nick <lerosecapitalpartn...@gmail.com>wrote:
>
> >> I got a response from the SEC.  They recommended to use arbitration
> >> since we probably agreed to settle any disputes using arbitration in
> >> our contract with Zecco.  Has anyone read our brokerage account
> >> contract to confirm if we are required to use arbitration?  I may look
> >> at it later tonight.
>

> >> If so we must go throughwww.finra.organd review the procedures for

> ...
>
> read more »

[Andrew]

Nick,

I've uploaded a copy of the most recent Zecco Account Agreement
Supplement that discusses arbitration:
http://class-action-for-zecco.googlegroups.com/web/Zecco_Trading_Account_Agreement_Supplement.pdf?hl=en&gda=cOhd42AAAADs1qUgYn4GBtgKfEYqMPPQRa00gu1sVBRnMD5oRdTmuoYem_DCm-cgMFgWOBBi7aceQ2feZdv66amSj-U1CQLlU5D3n_HbO7hZ-wOQlsjFvm3FU91bWBii3KPv5fvAM40&gsc=YRXK8wsAAABgXEj8O7wNMXxnwZPDnQPU

See pages 5 and 6.

On Apr 23, 7:26 am, Nick <lerosecapitalpartn...@gmail.com> wrote:
> I got a response from the SEC.  They recommended to use arbitration
> since we probably agreed to settle any disputes using arbitration in
> our contract with Zecco.  Has anyone read our brokerage account
> contract to confirm if we are required to use arbitration?  I may look
> at it later tonight.
>

> If so we must go throughwww.finra.organd review the procedures for

> ...
>
> read more »

[Evan Damiano]

I agree. So all we have to do is catch them doing it in writing and we have a great case.

[Nick]

I am still awaiting zeccos response...these people really piss me
off. I can provide a screenshot of my account that says -$606 on my
roth IRA. I wonder what the IRS will say to me if they audit me and
see my Roth IRA has a negative balance, lol. I should call them
tomorrow but there customer service wait times are terrible.

> > > >> If so we must go throughwww.finra.organdreview the procedures for

[Nick]

Ok, I got a response from Joe Chung at the compliance department
saying I am responsible for my trades (and my losses) due to the April
1st incident. Do any of you have any lawyers currently working on
this case? I believe we have something to go on since Zecco is
undoing trades where gains were made and forcing customers to take the
losses.

> > > > >> If so we must go throughwww.finra.organdreviewthe procedures for

[Evan Damiano]

can you please send out the letter so that we can review it?

Thanks
Evan

[Nick]

This is an email he sent me, he has not sent me a letter...

Dear Mr. LeRose,

While we can use that methodology across all accounts that took
advantage of the erroneous buying power figure, doing so would be
condoning what we consider an egregious act on the part of the
client. At some point, clients must be held accountable for their
actions. Clients who clearly abused the buying power figure were not
allowed to keep unjust profits. Please remember that it was Zecco
Trading’s capital that was placed into a high risk situation to obtain
illicit profits. As for the losses, clients knew going into April 1
that they did not have the buying power to make those trades, yet they
ignored common sense and made trades well beyond what they could
afford. While the firm may have a responsibility to clients to ensure
accuracy of data, we believe that clients owe a similar responsibility
to the firm by avoiding acts made in bad faith, as the numbers were
obviously incorrect. Ignorance, in this specific instance, is not an
acceptable excuse for the indemnification of losses.


I hope this response provides you with additional clarity.


Joe Chung

Senior Compliance Officer

Zecco Trading, Inc.

P.O. Box 60670

Pasadena, CA 91116 USA

On Apr 27, 2:49 pm, Evan Damiano <e.dami...@gmail.com> wrote:
> can you please send out the letter so that we can review it?
>
> Thanks
> Evan
>

> > > > > > >> If so we must go throughwww.finra.organdreviewtheprocedures for

[Evan Damiano]

heads you lose tails we win!? wtf!?

[Nick]

The SEC recommended that we file a low-cost arbitration claim with
instructions at www.finra.org.

On Apr 28, 12:10 pm, Evan Damiano <e.dami...@gmail.com> wrote:
> heads you lose tails we win!? wtf!?
>

[Qua$ar]

I haven't received an answer so far.

> ...
>
> read more »

[Qua$ar]

Has anyone been charged interest on their negative balance? am I the
only one?

> ...
>
> read more »

[Nick]

I dont have any interest charges, although I have a cash account and
never signed a margin agreement so I dont know how they could legally
charge me interest or hold me accountable for the negative balance.
That may be a different story if you have a margin account. How
negative is your balance? Mine is only $600, and those crooks are
never gonna see a penny of it from me.

[Andrew Mo (localandbitter)]

(Disclaimer: This is not legal advice)

All,

I found this law in the United States Code of Federal Regulations - Securities Exchange Act of 1934:

(http://law.justia.com/us/cfr/title17/17-3.0.1.1.1.2.85.281.html)

§ 240.15c2-5   Disclosure and other requirements when extending or arranging credit in certain transactions.

(a) It shall constitute a “fraudulent, deceptive, or manipulative act or practice” as used in section 15(c)(2) of the Act for any broker or dealer to offer or sell any security to, or to attempt to induce the purchase of any security by, any person, in connection with which such broker or dealer directly or indirectly offers to extend any credit to or to arrange any loan for such person, or extends to or participates in arranging any loan for such person, unless such broker or dealer, before any purchase, loan or other related element of the transaction is entered into:

(1) Delivers to such person a written statement setting forth the exact nature and extent of (i) such person's obligations under the particular loan arrangement, including among other things, the specific charges which such person will incur under such loan in each period during which the loan may continue or be extended, (ii) the risks and disadvantages which such person will incur in the entire transaction, including the loan arrangement, (iii) all commissions, discounts, and other remuneration received and to be received in connection with the entire transaction including the loan arrangment, by the broker or dealer, by any person controlling, controlled by, or under common control with the broker or dealer, and by any other person participating in the transaction; Provided, however, That the broker or dealer shall be deemed to be in compliance with this paragraph if the customer, before any purchase, loan, or other related element of the transaction is entered into in a manner legally binding upon the customer, receives a statement from the lender, or receives a prospectus or offering circular from the broker or dealer, which statement, prospectus or offering circular contains the information required by this paragraph; and

(2) Obtains from such person information concerning his financial situation and needs, reasonably determines that the entire transaction, including the loan arrangement, is suitable for such person, and retains in his files a written statement setting forth the basis upon which the broker or dealer made such determination; Provided, however, That the written statement referred to in this paragraph must be made available to the customer on request.

(b) This section shall not apply to any credit extended or any loan arranged by any broker or dealer subject to the provisions of Regulation T (12 CFR part 220) if such credit is extended or such loan is arranged, in compliance with the requirements of such regulation, only for the purpose of purchasing or carrying the security offered or sold: Provided, however, That notwithstanding this paragraph, the provisions of paragraph (a) shall apply in full force with respect to any transaction involving the extension of or arrangement for credit by a broker or dealer (i) in a special insurance premium funding account within the meaning of section 4(k) of Regulation T (12 CFR 220.4(k)) or (ii) in compliance with the terms of §240.3a12–5 of this chapter.

(c) This section shall not apply to any offer to extend credit or arrange any loan, or to any credit extended or loan arranged, in connection with any offer or sale, or attempt to induce the purchase, of any municipal security.

(d) This section shall not apply to a transaction involving the extension of credit by an OTC derivatives dealer, as defined in §240.3b–12, if the transaction is exempt from the provisions of Section 7(c) of the Act (15 U.S.C. 78g(c)) pursuant to §240.36a1–1.

For information regarding Regulation T and Margin or Cash accounts, refer to:

http://law.justia.com/us/cfr/title12/12-3.0.1.1.1.html

[Andrew Mo (localandbitter)]

In the Regulation T section of the Code of Federal Regulations, it states:

(http://law.justia.com/us/cfr/title12/12-3.0.1.1.1.html#12:3.0.1.1.1.0.1.3)

"Good faith with respect to:

(1) Margin means the amount of margin which a creditor would require in exercising sound credit judgment;

(2) Making a determination or accepting a statement concerning a borrower means that the creditor is alert to the circumstances surrounding the credit, and if in possession of information that would cause a prudent person not to make the determination or accept the notice or certification without inquiry, investigates and is satisfied that it is correct."

[Nick]

So they basically fraudulently offered us a credit line of $6 Million
dollars? Is that what you are trying to say? Have any of you gone to
finra.org to file a low cost arbitration?

On May 7, 9:17 pm, "Andrew Mo (localandbitter)"
<localandbit...@gmail.com> wrote:
> In the Regulation T section of the Code of Federal Regulations, it states:(http://law.justia.com/us/cfr/title12/12-3.0.1.1.1.html#12:3.0.1.1.1.0...)
>
> "*Good faith* with respect to:

> > person participating in the transaction; *Provided, however,* That the

> > broker or dealer shall be deemed to be in compliance with this paragraph if
> > the customer, before any purchase, loan, or other related element of the
> > transaction is entered into in a manner legally binding upon the customer,
> > receives a statement from the lender, or receives a prospectus or offering
> > circular from the broker or dealer, which statement, prospectus or offering
> > circular contains the information required by this paragraph; and
>
> > (2) Obtains from such person information concerning his financial situation
> > and needs, reasonably determines that the entire transaction, including the
> > loan arrangement, is suitable for such person, and retains in his files a
> > written statement setting forth the basis upon which the broker or dealer

> > made such determination; *Provided, however,* That the written statement

> > referred to in this paragraph must be made available to the customer on
> > request.
>
> > (b) This section shall not apply to any credit extended or any loan
> > arranged by any broker or dealer subject to the provisions of Regulation T
> > (12 CFR part 220) if such credit is extended or such loan is arranged, in
> > compliance with the requirements of such regulation, only for the purpose of

> > purchasing or carrying the security offered or sold: *Provided, however,*That notwithstanding this paragraph, the provisions of paragraph (a) shall

> > apply in full force with respect to any transaction involving the extension
> > of or arrangement for credit by a broker or dealer (i) in a special
> > insurance premium funding account within the meaning of section 4(k) of
> > Regulation T (12 CFR 220.4(k)) or (ii) in compliance with the terms of
> > §240.3a12–5 of this chapter.
>
> > (c) This section shall not apply to any offer to extend credit or arrange
> > any loan, or to any credit extended or loan arranged, in connection with any
> > offer or sale, or attempt to induce the purchase, of any municipal security.
>
> > (d) This section shall not apply to a transaction involving the extension
> > of credit by an OTC derivatives dealer, as defined in §240.3b–12, if the
> > transaction is exempt from the provisions of Section 7(c) of the Act (15
> > U.S.C. 78g(c)) pursuant to §240.36a1–1.
>
> > For information regarding Regulation T and Margin or Cash accounts, refer
> > to:
> >http://law.justia.com/us/cfr/title12/12-3.0.1.1.1.html
>

[Andrew Mo (localandbitter)]

(Disclaimer: This is not legal advice)

Nick,

It looks like it could be a violation of Regulation T. I am not sure if it entails a cause of action and what remedies may be available.

Regulation T also states in its general provisions:

"(h) Innocent mistakes. If any failure to comply with this part results from a mistake made in good faith in executing a transaction or calculating the amount of margin, the creditor shall not be deemed in violation of this part if, promptly after the discovery of the mistake, the creditor takes appropriate corrective action."

I would assume that Zecco would claim this was an "innocent mistake." I wonder what "appropriate corrective action" is?

[Nick]

Considering my account is a cash account,

(a) Permissible transactions. In a cash account, a creditor, may:

(1) Buy for or sell to any customer any security or other asset if:

(i) There are sufficient funds in the account; or

(ii) The creditor accepts in good faith the customer's agreement that
the customer will promptly make full cash payment for the security or
asset before selling it and does not contemplate selling it prior to
making such payment;

I am wondering if I could get anywhere arguing that they treated my
cash account like a margin account without my approval.

On May 11, 6:00 pm, "Andrew Mo (localandbitter)"

<localandbit...@gmail.com> wrote:
> (Disclaimer: This is not legal advice)
>
> Nick,
> It looks like it could be a violation of Regulation T. I am not sure if it
> entails a cause of action and what remedies may be available.
>
> Regulation T also states in its general provisions:

> "(h) *Innocent mistakes.* If any failure to comply with this part results

> from a mistake made in good faith in executing a transaction or calculating
> the amount of margin, the creditor shall not be deemed in violation of this
> part if, promptly after the discovery of the mistake, the creditor takes
> appropriate corrective action."
>
> I would assume that Zecco would claim this was an "innocent mistake." I
> wonder what "appropriate corrective action" is?
>

[Nick]

Well I am going to file an arbitration against them. It only costs
$300 and at least I will have some closure on this thing if the
arbitrator does not agree with me that Zecco was negligent, breached
fiduciary duty, treated my cash account like a margin account, and in
my particular case one of their traders outright lied to me on the
phone.

[Cyber]

Here is the email, that I got.
Apparently, they are going to liquidate my account.
Have you guys got this email?
My account is cash account so the deadline may be different but it
seems like Zecco keep going with their evil intention.

Dear Client:

As a result of current market conditions, your account requires
additional Margin Maintenance. If corrective action is not taken by
12:00 p.m. ET, we may liquidate securities in your account, at your
risk, sufficient to bring your account into conformity with our Margin
Maintenance requirements. If subject to liquidation, please know the
securities will be liquidated “at the market” commencing shortly after
the time set forth above (or as soon thereafter as is practicable). If
your account has multiple concentrated maintenance or required
maintenance margin calls, you may be sold out on the earliest due date
for the sum of all calls. Any deficiency remaining following such
liquidation will continue to be your obligation.

Please make arrangements to meet the call and notify our Customer
Service Department immediately regarding your choice of action or for
further clarification at (877)-700-7862.

This notice is provided as a matter of courtesy with the understanding
that it does not constitute a waiver of any of our rights, whether
under a written agreement or otherwise. We also reserve the right to
take liquidating action prior to the date and time indicated if in our
judgment market conditions dictate.

NOTE- CASH ACCOUNTS: If you have a cash account and are receiving
this Sell Out Notice, please know that you may have a different due
date. Please contact us immediately at (877)-700-7862 for details or
visit the Margin Call Summary Page under “Account Records” once in the
Trading Center of the Zecco Trading website.



Thank you for your immediate attention to this matter.

Best Regards,

Zecco Trading

Margin Department



Zecco.com is a financial portal of Zecco holdings, Inc. Zecco
Holdings, Inc. is not a securities broker/dealer.
Securities offered through Zecco Trading, Inc. Member FINRA www.finra.org
/ SIPC www.sipc.org.
Please read http://www.zecco.com/trading/TradingDisclosures.aspx.
Zecco Trading, Inc. and its associates
may not accept instructions to execute securities transactions or
funds transfers via email.

The content of this message and its attachments is intended only for
the use of the intended recipient and
may contain confidential and privileged information. If you are not
the intended recipient, any dissemination,
distribution, or copying of this message or its attachments is
prohibited. If you received this message in error,
please notify the sender by replying to this email or by calling Zecco
Trading, Inc. at 877-700-7862 immediately
and delete this message and its attachments from your computer. All
communications sent to or from
Zecco Trading, Inc. are subject to archival and review by Zecco
Trading, Inc. and by regulatory and law enforcement authorities.

> ...
>
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> ...
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[Qua$ar]

I received the exact same e-mail

> date.  Please contact us immediately at(877)-700-7862for details or

> visit the Margin Call Summary Page under “Account Records” once in the
> Trading Center of the Zecco Trading website.
>
> Thank you for your immediate attention to this matter.
>
> Best Regards,
>
> Zecco Trading
>
> Margin Department
>
> Zecco.com is a financial portal of Zecco holdings, Inc.  Zecco
> Holdings, Inc. is not a securities broker/dealer.
> Securities offered through Zecco Trading, Inc. Member FINRAwww.finra.org
> / SIPCwww.sipc.org.

> Please readhttp://www.zecco.com/trading/TradingDisclosures.aspx.

> ...
>
> read more »