Quote from tradingbug:
I would like to share my situation with people who are more aware of the rules and regulations. I have an online account in etrade that I have been with for a couple years. 3 weeks ago, while i was on vacation, I got an etrade phone call saying they had closed my account due to suspicious activity. I inquired about the activity and they said they could not divulge info. They suggested cleaning out my comp for spyware and resetting my login password. I said I would not be able to for another few weeks as I was on vacation.
fast forward 2 weeks.......zip
I returned from vacation, reset my comp and looked into my account. Someone had broken into my account and taken 4 grand from it. E-trade is trying to tell me that I am responsible for the loss. I told them that this is fraud and any bank should protect their customers from fraud and security breaches. I also said that they knew what was going on if they closed my account automatically since they suspected something fishy was going on with my sccount. Why didnt they cancel the transfer of 4 grand since they were smart enough to close my account due to suspicious activity. It is obvious they knew their was a security breach. Another question I asked was how many other people had the same security breach and had money taken from them. They responded that they are not allowed to give out that kind of info.
Please let me know what is the best course of action or at least what I am responsible for and what I am not responsible for. Doesnt the FPIC insure up to 100 g for fruad?
Thanks in advance
You've received lots of interesting advice, thus far. Unfortunately, most of it is leading you on a wild goose chase.
The first question that I have is: Is this account with ETrade, a brokerage account or a savings account (ETrade Bank), because the governmental regulatory agencies are not the same. For the balance of this discussion, I will assume that it is a brokerage.
You have the right to arbitrate your claim under NASD rules, and ETrade, as a member of NASD must permit the arbitration. Your customer agreement with ETrade almost certainly, as does every brokerage customer agreement in the U.S., contains a section whereby you waive your right to litigate account-related issues in court, and whereby you agree to the jurisdiction of the State of wherever ETrade wants this arbitration to take place -- usually NY.
So, small claims court, and/or any other court is out -- you must arbitrate any civil complaint. Now, as to the complaint itself, you could have a tough road, because supposedly you were informed that your account was compromised, and you have admitted that you took no action. This is known as being contributorily/comparatively negligent, which means that your negligence will offset ETrade's in any computation of damages, assuming you can prove negligence.
However, it's just possible that you weren't contacted by ETrade at all. Perhaps you were called by the very persons who stole your money, in order to assess your ability to quickly discover the theft, after it occurred -- in other words, when you were contacted, perhaps the theft hadn't even taken place yet.
Anyway, usually, a company like ETrade will notify you both by phone and in writing of unauthorized activity, and it is almost inconceivable that they would not immediately issue you an new password and userid, if they were suspicious about account activity.
To the extent that you believe that a criminal theft has taken place, you can certainly contact the FBI and file a complaint. You can also contact the Securities and Exchange Commission, because if ETrade's procedures are actually as lax as you describe, then they will probably get their ass handed to them by the government.
If you are intent on doing this all yourself, then you need to find out who at ETrade deals with fraudulent/unauthorized transactions, and then write them a letter detailing the events and asking for them to investigate. The letter should state that if you do not receive a response within 10 calendar days from the date of its receipt by ETrade, that you will file a complaint with the SEC and the FBI.
Send the letter certified mail, return receipt requested. The letter should not be hostile -- it should just state the facts and demand a timely response. Remember that the first person who reads your letter will be an assistant to an assistant who really has no power to help you. You have to work the system.
This is not a case of fraud against you, it's a case of fraud against Etrade. Against you, it's a case of theft by deception. ETrade may be negligent for permitting the fraud, and you may have some damages for your $4K plus interest and attorney fees and arbitration costs, but you are not gonna get some big score, unless the person who stole from you has deep pockets, and he/she is actually caught and convicted.
One more place you can go. Some local law enforcement agencies in bigger cities have internet crime units. If so, then you may be able to get a complaint filed locally. However, this crime probably didn't occur in your jurisdiction -- it was probably interstate, and that means the FBI.
