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

Quote from shortie:

that was in Sept and now is Dec. that can't be it.
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Well, I wouldn't be so quick to assume that. If I recall properly, the person starting this thread added his secondary trader in September and got nailed in December.
 
Quote from phantomflash:

I'm not a party to this situation, but I've been reading this thread and I'm surprised so many people don't know it's perfectly OK at IB to add alternate traders to one's account -- even an individual one. I did so myself for a period of several months, although both of us are in the U.S. Adding a 2nd trader is just another menu item on the IB site. Nothing there says it can't be overseas.

Other responders keep raising objections based on this being a foreign account, when he clearly said it's not. It's a U.S. account.

IB has customers all over the world. Unless they prohibit customers in country "X", they have no business being so sticky about a 2nd trader in that very country. Not, at least, unless they WARN YOU IN ADVANCE that this could be a problem unless you follow procedures a, b, and c and make sure not to violate rules x, y, or z, all of which they need to lay out for you.

Blindsiding a loyal longtime customer who only wants some trading help with this kind of "death penalty" doesn't seem logical. Especially without allowing him to cure the problem. They could simply disallow any secondary traders on his account, taking him back to status quo ante, to which of course they never had any objection.

I can think of only one possible reason for IB's action: If the customer created the 2nd trader under one identity, but actually the person doing the trading was someone else. After reading some of the comments on this thread I can see where they might object to that if the 2nd trader were overseas. But such an objection wouldn't have occurred to me before today.

Just a thought, but possibly the customer involved might be able to resume trading at IB if he was able to form a corporation, LLC, etc. where he was only a minority owner.
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Update to the situation. A letter has been emailed to IB's Chairman with no reply so far. Again, as IB states no reason for the "termination" of the relationship, one assumption is the "alternate login" relationship with a trader who is not in the U.S., although the account is long-standing and in good standing.

IF the alternate login was found to have a problem with "compliance" (a couple of months later), then it would seem an offer should have been made to have that removed, thus restoring the account to its original status.

I will update the thread when more info comes in. December 25 is the final date IB has given for funds to be withdrawn, so there's some time for IB to reconsider in this case.
 
Quote from asap:

i dont know where you got that idea but is totally wrong.

from IB
"
For individual accounts (individual, joint, and IRA accounts), up to 15 persons may be added with a Power of Attorney which will be provided when adding users to an individual account.
"
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For those who had this problem with IB after adding additional traders to your accounts, did you ever sign the Power of Attorney forms and legally add the additional users/traders to your accounts or you simply added as you liked it?
 
Just to get closure here, my trader friend was duly dumped by IB and our appeals to the CEO were met with no reply. Currently he is with Infinity Futures.
 
d08 said:
Having a similar issue, added another user (family member) in the same country (in EU), now in liquidation only mode for over 2 weeks. Calling every other day and they keep promising to fix the issue (promise to call back as well while never doing it).
This seems to be a way to get rid of successful short sellers, next thing will be keeping only the losing traders to prop up the MM business and achieve even higher profit margins. It's the only possible reasoning I can see right now.

Why I don't just leave IB?
I programmed my systems using the IB API in good faith, thought it was a safe bet. Obviously I was wrong.
The guys who praise IB for actions like this will find themselves in a similar situation at some point, then it won't be so awesome.
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Just received an account closure letter from IB letter.... how did you sort it out? I am in the same boat as the one you were in (short seller, EU, etc....)
 
I also got a similar account closure letter.They simply stated as below

Following our review of your account, we regret to inform you that we have determined to terminate IBKR’s client relationship with you. This letter serves to inform you that Interactive Brokers will be closing your account on the last business day of September 2020.

No explanation as to why they are doing this.
 
The same. Googled and this was the first forum I found. I am from EU and I've been client for 5+ years, but recently I haven't deposited any money. Only withdraws.
 
I recieved the same letter on wednesday in relation to my business account. I am also from EU, client since 2014. They did not respond to my inquiry about why they are terminating the account yet.
Apart from failing to keep up to date some things in the account management I am not aware of any wrongs on my side (also if this was the issue I would expect them to at least issue some warning first).
 
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