Legal question for TLG

[stupidzbu]

I have had some major issues with Ameritrade.com .. and so has my room mate..

Basically... there is no information available on their web site about EFTs.... and I had never done one before...

I called a Rep, and was told that it was ALL or NOTHING... if the EFT went through, the money was in my account and ready to buy stocks with.. no problem...

I did an EFT for $3,000 in Nov 15 2000... by Nov 22,2000 they had short sold all my stocks and I was -$620 in the account.. I had to cover that ... and was left with $2,400

it was a mistake on my part.. i mistyped the number of my bank account...

BUT... if the Rep hadn't misrepresented the way EFT's worked, I would have actually checked to see if everything was alright..

also.. i found out that the EFT was rejected FRIDAY Nov 17,2000 .. I did not receive a phone call, only an email dated Nov 20, 2000 ...

my question is simple... Knowing some of the basics of my case... if I file a small claims suit for $620:
1) Do you think they will show up in Orange County Court?
2) IF they do show up, can anything happen to me if I lose? More specifically, can they counter-sue me for lawyer expenses and time lost?
3) Is it worth the risk?

let me give you some detail about my room mates case... He put it an order to buy PSIX at market price.. then cancelled it because it didn't go through.. then he did it again.. cancelled it a second time.. then did it a third time, and cancelled it again..

He received some confirmations... One was for a purchase of 1200 shares @ $2.93 ... the other was for a sale at $3.93 ... the last one was for a purchase @ $3.93 ..

he woke up.. sold the stock... and had $5,000 in his account.. with a profit of around $1300 ...

he requested a check... for the funds outstanding.. and bought stock with the rest of the money....

AMeritrade.com however, claimed that the check request was non0existant (he has an email confirmation).. and that the Trade COnfirmations received had a TYPE-O on them! They claim that all original purchases occured at $3.93, therefore he wasn't entitled to the $1300 profit...

BUT, he has confirmation not only online, but a paper confirmation directly from Ameritrade....

same questions as above!

thanks in advance

(i've also tried to get a class action lawsuit, but I keep on getting deferred to other lawyers!)

[stupidzbu]

I just filed my claim with Stull, Stull, and Brody in the class action against RMBS....


i think I am involved with the class action against PSIX (if the last one wasn't thrown out like the other 15 by the judge)

[TheLoneGunman]

I am still unclear on some the facts, but I can offer you some advice.

1. Normally you CANNOT SUE your BROKER because you sign what is called an ARBITRATION CLAUSE when you open your account. This says that you agree that even if they run over your mom with a steamroller, you still have to go to a mediator instead of the court.

2. Venue - This refers to the location where you need to sue. Since I don't believe any "act" took place in Orange County, you can't sue there. (California Small Claims venue chart:
a. hq of business
b. site of injury/accident (yours was cyberspace, not your house so this doesn't apply)
c. place where contract took place (again, in your registration docs it probably showed this location and I doubt it was Orange County)
d/e/f - all don't apply

3. Normally, paper trade confirmations are the final word. It should say that on there. I have had disputes with E*Trade (see "It's a crime for ETrade" threads) and the paper copies all were the final word. Therefore, you might have grounds, but you have to sue in the right court (see #1 and #2 above)

4. Class Action - Individuals do not initiate class action law suits, only lawyers do. Basically, if there are a number of "similarly situated" plaintiffs, then the judge can create a "class" and allow them to sue as a group. I don't see how that is the case here. Also, in Class Action cases, the lawyers get huge fees and the plaintiffs get very little.

Hope that helps.

[stupidzbu]

well.. what I meant by the classa action thing.. was that I wanted to bring it to the attention of a lawyer to try to open a case for class action...

I need to look into the venue thing.

I was going on that the paper work took place online, therefore it took place in orange county, because that is where I filled them out and electronically signed them...

I'm going to call a rep and ask him about the arbritration clause. I remember studying some case-studies about it in a Law & Market class....

so I might have to take that turn...

to sum it up in a nut shell...
Instead of printing out the paper work and mailing it in with a check, Ameritrade offers an online method where you electronically sign the papers and provide the bank routing # and bank account #.
They generate their own check, which they cash. This is what they term an EFT. I was told by a rep that if it went through, the money was as good as gone. Instead, the EFT failed. He assured me that it could only fail while I was attempting it.

When the EFT failed, my account was negative because I bought $3,000 worth of stock with no cash in it. So they sold all my shares and I was left to pick up the negative $620 balance.
I am seeking that $620 on the grounds that the rep was an idiot and misinformed me about the process of an EFT.