Optionsellers.com goes bust and the apology video is painful to watch

[vanzandt]

And now they’ve deleted the video!

Part art part science.
-LL

 

[PJB1994]

It's obvious this guy is not gonna offer any additional information that would make his story in the slightest credible. He already contradicted himself so many times that I am convinced he is not what he states he is.

Right .... I'm a troll here to confuse and mislead you . If you really wanted to know what is going on, you could simply ask relevant questions or ask for clarification and not be so condescending. Anyway, I'm not here to educate you.

 

[JSOP]

The fact that they aren't allowed to short naked calls in an IRA is probably why the lawyer is going after FC Stone. None of the documents talked about naked options. The IRA was set up through Midland as a self-directed IRA.

So INTL FC Stone is not going to liable for the shorting in IRA then. The law firm is going after INTL FC Stone for not doing the due diligence in supervising the client to ensure no naked shorting is being done in the IRA accounts but if the IRA is set up as a self-directed IRA in Midland then INTL FC Stone has no responsibility to supervise anything here. FC Stone is just a clearing firm, what it does is it 1) lends its clients (Optionsellers.com) money to trade via margin and 2) it executes the trades. If the IRA is a self-directed one, it means the person that owns the IRA has the full responsibility to ensure it doesn't naked short there. Since it's Optionsellers.com that's given the POA to trade in the self-directed IRA, it essentially becomes the owner of that IRA account and hence is the one responsible to ensure that naked shorting of options is not undertaken in the IRA account if it's not allowed.

The lawyers is not going to get anything from FC Stone. If I were the law firm, I would concentrate solely on optionsellers.com and James Cordier, and not waste time or the money of the investors who's already lost so much on FC Stone. All what it comes down to now is how much can be recovered from optionsellers.com and James Cordier.

 

[PJB1994]

So INTL FC Stone is not going to liable for the shorting in IRA then. The law firm is going after INTL FC Stone for not doing the due diligence in supervising the client to ensure no naked shorting is being done in the IRA accounts but if the IRA is set up as a self-directed IRA in Midland then INTL FC Stone has no responsibility to supervise anything here. FC Stone is just a clearing firm, what it does is it 1) lends its clients (Optionsellers.com) money to trade via margin and 2) it executes the trades. If the IRA is a self-directed one, it means the person that owns the IRA has the full responsibility to ensure it doesn't naked short there. Since it's Optionsellers.com that's given the POA to trade in the self-directed IRA, it essentially becomes the owner of that IRA account and hence is the one responsible to ensure that naked shorting of options is not undertaken in the IRA account if it's not allowed.

The lawyers is not going to get anything from FC Stone. If I were the law firm, I would concentrate solely on optionsellers.com and James Cordier, and not waste time or the money of the investors who's already lost so much on FC Stone. All what it comes down to now is how much can be recovered from optionsellers.com and James Cordier.

Thanks for the update. Then I guess we are screwed because I doubt OptionSellers will have any resources. I'm estimating the damages are in the 100s of millions (290 clients with a minimum $500,000 to $10,000,000 each).

 

[JSOP]

There was nothing I could find in the paperwork about naked options. Midland did mention that futures were allowed. If you are interested, look up Midland Self-Directed IRAs & 1031s. I wonder if Midland has any responsibility for allowing naked options?

It's a self-directed IRA which means the owner or whoever has managing authority of that account is solely responsible for ensuring that no naked shorting is done in the account, hence self-directed. If this IRA account is set up and managed by Midland then if Midland performs any naked shorting of options which is not allowed then you would have a case against Midland.

 

[JSOP]

Thanks for the update. Then I guess we are screwed because I doubt OptionSellers will have any resources. I'm estimating the damages are in the 100s of millions (290 clients with a minimum $500,000 to $10,000,000 each).

Depending on how optionsellers.com is set up and how the law in Florida is, you MIGHT still be able to get something. If naked shorting of options is completely forbidden in IRA accounts and James Cordier, who's been given POA to manage these self-directed IRA is fully aware of the restrictions on IRA account then is negligent and failed its fiduciary duties and duty of care and is in clear violation of management of IRA accounts and even fraud in his naked short selling of options, and if it can be proven that James Cordier personally has benefitted from these negligent and fraudulent investment endeavours then the court might go after James' personal assets even if optionsellers.com is bankrupt.

Check with a lawyer!

 

[PJB1994]

It's a self-directed IRA which means the owner or whoever has managing authority of that account is solely responsible for ensuring that no naked shorting is done in the account, hence self-directed. If this IRA account is set up and managed by Midland then if Midland performs any naked shorting of options which is not allowed then you would have a case against Midland.

Thanks very much. Do you have any idea how the debit balance at FC Stone for the IRA account will be handled? I assume I have to pay that with after-tax dollars and write it off as a capital loss? So, Cordier took the money out of the IRA and then FC Stone provided the leverage, so now I owe FC Stone for the negative balance? Wonderful.

 

[ironchef]

If the IRA is a self-directed one, it means the person that owns the IRA has the full responsibility to ensure it doesn't naked short there.

I don't think that is correct? Schwab won't let me trade naked shorts on my self directed IRA, said it was not allowed?

 

[manonfire]

Thanks for the update. Then I guess we are screwed because I doubt OptionSellers will have any resources. I'm estimating the damages are in the 100s of millions (290 clients with a minimum $500,000 to $10,000,000 each).

you are golden or you are not. Depends what you account agreement says.

 

[smallfil]

Thanks very much. Do you have any idea how the debit balance at FC Stone for the IRA account will be handled? I assume I have to pay that with after-tax dollars and write it off as a capital loss? So, Cordier took the money out of the IRA and then FC Stone provided the leverage, so now I owe FC Stone for the negative balance? Wonderful.

The broker could be held liable in the IRAs case. Most brokers will not even allow you to trade options outside of covered calls meaning you have to have the stock at hand before you can sell a call. Fidelity Investments allow only covered calls for IRAs. TD Ameritrade will allow you to buy call and put options. That is less risky than selling naked call options as your maximum risk is the cost of the call option say $300. That is in a worst case scenario. Consult a good attorney. The broker is atleast, complicit in allowing such trades as selling naked calls using IRA monies.
Your attorney might be able to claw back some of the IRA monies from the broker. There are restrictions placed by Federal authorities on brokers precisely, to protect investors in the case of IRA monies since, it is for retirement.