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

[JSOP]

I know! Who the hell made that law? Makes zero sense as I agree that futures are far risker than stocks and when paired with options, seems even more risky. I think I'm basically screwed. The losses are likely in the hundreds of millions (290 clients with minimum $500k to $10 million each all wiped out PLUS the damn debit balances). It's bad enough that the money from the accounts is gone, but having to pay a debit balance is excruciating. OptionSellers is a small shop with just a handful of traders so I honestly don't know how much they have. The severity of this guy's screw up is stunning.

Well like I said, if James Cordier is found to be negligent and violation of fiduciary duties and not trading according to client instructions, the court MAY, just MAY go after his personal assets if he's been found personally benefitted from his investment activities. All it comes down to is what did he promise you when you gave the POA. Did he specifically promise you he would do vertical spreads and/or iron condors? Check your POA and check with your lawyer to see what he/she says.

I agree it's the debit balance that's especially aggravating; it's really adding salt to the wound. And there in the video, Cordier was still thinking of all the wonderful things that he was looking to do with all the clients.

 

[JSOP]

In his video, he said "hedge fund" but I don't believe that is true. He had POA to trade out of each individual account. As far as writing off the capital loss for the IRA, I will speak to my accountant. Unreal. It will be interesting to see how FC Stone reports the losses - would it even differentiate between the IRA and taxable account? I'm assuming I'll also get some type of statement from Midland at the end of the year with my whopping zero balance. The more I think about this, the more complex it gets. I'm sure this isn't something accountants see very often!

So your taxable account is with FC Stone? It's residing with FC Stone not with optionsellers.com? So optionsellers.com is an introducing broker and acting as POA? That sounds to me also like a conflict of interest if that's the case. If Midland is the custodian of your IRA account, I don't think you would get a statement from FC Stone on your IRA account.

 

[themickey]

I know! Who the hell made that law? Makes zero sense as I agree that futures are far risker than stocks and when paired with options, seems even more risky. I think I'm basically screwed. The losses are likely in the hundreds of millions (290 clients with minimum $500k to $10 million each all wiped out PLUS the damn debit balances). It's bad enough that the money from the accounts is gone, but having to pay a debit balance is excruciating. OptionSellers is a small shop with just a handful of traders so I honestly don't know how much they have. The severity of this guy's screw up is stunning.

Is there any mention in their fine print contract with you that you can lose more money than what your account holds?

 

[JSOP]

These lawyers are leading the attempt to recover funds for the victims of OpitonSellers and INT FC Stone: http://www.optiontradinglaw.com/

Another ambulance chasing law firm has joined in the fray. This one is even recommending not to pay the debit balance.

 

[PJB1994]

So your taxable account is with FC Stone? It's residing with FC Stone not with optionsellers.com? So optionsellers.com is an introducing broker and acting as POA? That sounds to me also like a conflict of interest if that's the case. If Midland is the custodian of your IRA account, I don't think you would get a statement from FC Stone on your IRA account.

OptionSellers has none of my accounts. We had to set up the Midland account for the IRA, but we also have two account numbers at FC Stone. We got two different statements from FC Stone daily via email - one with the transactions done for the retirement money and the other for the taxable. Each contained the total liquidating balance amount for each account. I’ve never seen the Midland statement - perhaps it’s online but now I’m curious what’s on it! We had only been with OptionSellers since June so not sure if they mail them out quarterly. I’ll check online tomorrow. Thanks for your help and input.

 

[PJB1994]

Another ambulance chasing law firm has joined in the fray. This one is even recommending not to pay the debit balance.

Interesting. I certainly would prefer not to pay the debit amount. I just don’t want to risk the penalties and interest charges. What a friggen disaster!

 

[PJB1994]

Is there any mention in their fine print contract with you that you can lose more money than what your account holds?

I will look again but I didn’t see anything like that. It do remember reading that I could lose principle, but that is always the case. I will reread the documents in the morning. Thanks.

 

[JSOP]

OptionSellers has none of my accounts. We had to set up the Midland account for the IRA, but we also have two account numbers at FC Stone. We got two different statements from FC Stone daily via email - one with the transactions done for the retirement money and the other for the taxable. Each contained the total liquidating balance amount for each account. I’ve never seen the Midland statement - perhaps it’s online but now I’m curious what’s on it! We had only been with OptionSellers since June so not sure if they mail them out quarterly. I’ll check online tomorrow. Thanks for your help and input.

Both accounts are with FC Stone? Does FC Stone offer IRA accounts? If yes, why did he set up your IRA account through Midland then? He could've set up the IRA account directly with FC Stone if FC Stone is going to be the one ultimately providing you the leverage. Did he want to get "finders' fee" from Midland? Weird.

Glad I was of any help to you. Hope you recover your funds soon!

 

[JSOP]

Interesting. I certainly would prefer not to pay the debit amount. I just don’t want to risk the penalties and interest charges. What a friggen disaster!

By all means give them a call to see what they say. I have a feeling though that they are just saying that to lure business to their firm. Once you've told them the whole story, they might still recommend you to pay the debit balance but by all means get a second opinion. It never hurts to ask.

 

[Quiet1]

Naked options on futures are not more risky than naked options on stocks. People confuse smaller margin requirement with riskier in futures land but that tells you in fact it's the other way round. It's not quite an everyday occurrence for stocks to rise or fall 50%+ in a day. It's vanishingly rare in futures markets. NG prices did not rise 40% in one day after all.