IB: "...terminate our relationship with you..."

Kudos on IB, prudent and proper action taken.

I really like it when regulations and compliance is being observed and adhered to.

1) IB cannot give the reason why they closed the account because they may then get themselves in some legal loophole.

2) Since this is an non US account and the OP is associated with the foreign party enough to give him /her trading access one may suspect that both parties have other discussion regading trading and markets being traded.

3) If these markets are the same (e.g. currency) then it may well be that a position may be open in both directions at the same time. This is in direct violation of security trading rules - only a market maker may do this.

There was even a posting about a guy who created several accounts and then in after hours market started to trade between the accounts to make it look like lots of activity and moving the price artificially. He got caught and appeared in court and got convicted. (I do not know who the broker was, he was found out through the exchange who traced the accounts placing the orders)

Moral is: never give anyone else trading access to your account.

Maria
 
Well what happens if the customer doesn't want to close his losing positions and can't transfer them either because he finds no other suitable broker that will hold these securities . That could really be the case with IB given all the markets they offer ?
Would he have to take a loss because IB would liquidate ?
 
They do that sort of thing now in reaction to a margin call situation.

They'd probably give you the chance to close your positions as best you can and then just liquidate and cut a check when you run out of time.
 
Quote from Barth Vader:

Verdict: Jumping to conclusions without knowing all of the facts.

Maybe the off-shore entity is a family member, business associate or some other trusted entity.
More...

Clearly ......you dont get it.

no one gives a crap WHO it was. This kind of behavior opens the door to all kinds of fraud.

If you can't see that , you have a problem.
 
Quote from stock777:

Clearly ......you dont get it.

no one gives a crap WHO it was. This kind of behavior opens the door to all kinds of fraud.

If you can't see that , you have a problem.
More...


Friend, I have many problems !!

One of which is calling someone "dumb" without a visual, in person review :)

I respect your opinion, but some, like myself, have trusted family members on the account also.
 
Homeland Security: Clearly your friend is a terrorist who is laundering money. And quit being a bitch about it on the internets. It's not you, so what do you care.
 
Having a family member on the account was not the problem , it was the FOREIGN LOCATION.

I'm sure you can figure out the implications of that.

Like it or not , appearances are everything today.

And we all do things that in retrospect can be classified as dumb, and not vetting this move beforehand qualifies.
 
This is how it works today:

Every time ANYONE no matter where they are located opens an account with a USA firm, there is a complete, GLOBAL background check and identity verification of that person. It is a legal requirement called, "know your customer" or something similar and is part of the new compliance schemes put in place after 9/11 and is very serious business with the US government.

By giving access to a party IB had not had a chance to vet through their formal compliance checks, you bypassed their controls and created a legal and compliance risk for the firm that is much greater than your business is worth.

Consequently, they chose to terminate their relationship with you. It is simple, there is nothing you can do but move on.
 
Many security departments will not tell you what flags you tripped because giving out that information reduces their ability to detect problems in the future.

E.g. if they told you they determined the IP address of the person using the alternate login you created was in a country they don't want to be involved with then next time someone, armed with that information, will proxy their traffic through a safe country to bypass that check.
 
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