Possible Etrade Fraud

You might try emailing or PMing ET member kjkent1. I believe he is a lawyer. While I'm sure he wouldn't give you free legal representation, he might give you a couple clues as to what could be your next best move.

Good luck

http://www.elitetrader.com/vb/member.php?s=&action=getinfo&userid=31117

Quote from etradevictim:

:mad: During our absence from this country in July, some hackers were able to wire out funds many times to a total more than $150,000. to a Wells Fargo account that was not registered in our name. All these funds were wired out on margin and finally they also sold some of our holdings that we had for a long time. Still there is a negative cash (margin) balance that is accumulating interest everyday although e-Trade said they froze the account after they realized the fraud following many transactions each one strangely slightly below $30K. Strangely, we have never wiredout a penny from this account during its life - this did not flag them or alert them to check !!!
e-Trade is not taking any responsibility at all and blaming us for not securing our computer properly. After all these transactions, they finally realized the fraud and tried to contact us but we were not here and they apparently froze the account then - too late !
Whe we ask how they could wire funds to a 3rd party account, they say that the hackers included our name as the account holder - without checking whether it was indeed in our name - it turns out that it is not and we never gave them written permission to transfer funds to a Wells Fargo Bank account.
We did contact an attorney but apparently we cannot sue them ! We can only arbitrate and that too in CA where e-Trade security folks are.
Dont they have any insurance against such fraud?
So far, e-Trade did not send us any document confirming the fraud that happened although they did mention it in our conversations. In addition to all these, we have to worry about tax issue.
They did not care to answer any of our letters written to many including CEO and President/COO.
We are trying to contact various TV folks to see if anyone can help us. Any help with this will be highly appreciated.
More...
 
Quote from etradevictim:


We did contact an attorney but apparently we cannot sue them ! We can only arbitrate and that too in CA where e-Trade security folks are.
More...
Surely the laws regarding banking are in force here not the bogus laws regarding brokers which only exist to protect the brokers not the customers.

Your account funds are segregated. If you can show an unauthorized ACH pull was used to take out your funds, you should be able to go to the bank holding your account in trust and recover those funds from the bank.

If I lost $150K, I would not be so casual about taking the word of the first lawyer I came across. Lawyers have varying degrees of skill and the one you got might not understand the law in this area as well as another would.
 
You should file an sec complaint and one with the ctfc. Your money is yours and it still is. The full amount. This fact does not depend on the skills of the etrade programmers or their willingness to implement security or their ability to find the thief. The money is yours. Its a banking issue, not a brokerage issue.
 
There is a lot of federal case law on this issue. The question is whether or not this loss is within the arbitration agreement. The argument would be that you agreed to arbitrate only the securitites-related disputes, not disputes regarding theft from your account. My guess is they would not want to risk the publicity and would settle. If you filed a federal court action and lost, you would not actually lose your right to recover. Instead you would be remanded to arbitration.

The downside is that this will cost a fair amont of money.
 
Thanks folks - Choad, PuffyGums, AAAUbtheBeltway and brewmiester for your feedbacks.
I did send an e-mail to kjkent1 but did not get any answer.
I contacted many other attorneys in our area.
Yes - I did file a complaint with SEC, CTFC,etc
Some of the local TV news folks seem to get interested in the story and wish to follow it up.
I tried idasp - it is not clear how I could get in touch with them.

I still cannot understand how e-Trade could transfer funds from my account to an account that was purportedly ours (as hackers made them believe) and that was not one we gave approval when I opened the account and later on.
Irrespective of how that wire request went, e-Trade should not have approved it without first checking our records and/or calling us for a written approval.
It looks like it is so straight forward and clear but e-Trade does not admit the mistake made by one of their employees (who might have been fired by now).
 
Been with E-trade many years, retail account. I phone in all my wire transfers. They have a number of questions of my design they ask me for verification. Last 4 digits of ssn, mothers maiden name,dogs name, address, city, state and zip, dob, bank, bank ABA, my full name, acct. name (has to go to same name that is on E-Trade acct) acct#, E-Trade acct. # and password, and I get the name of the person doing the transfer. I get my transfer within 2-4 hours. Never a problem.

I don't understand. Were all these losses originated over the net. as wire transfers? A wire transfer can only go to the bank name, bank account #, ABA and the owners name of that bank account that is on file at E-Trade. The bank account owners name has to be the same as the E-Trade account owners name.

It would be impossible for a perp. to open a mirror acct. He would need a D/L with the same name and address, an identical SS card, and most impossible, an exact acct#.

Help me out here, how is this possible?
 
Quote from mktup:
It would be impossible for a perp. to open a mirror acct. He would need a D/L with the same name and address, an identical SS card, and most impossible, an exact acct#.

Not impossible - that's exactly how it's done. Someone steals your identity, opens an account in your name, and transfers all your money to it. Google "identity theft".
 
mktup writes:
"I don't understand. Were all these losses originated over the net. as wire transfers? A wire transfer can only go to the bank name, bank account #, ABA and the owners name of that bank account that is on file at E-Trade. The bank account owners name has to be the same as the E-Trade account owners name."

This is exactly what we have been arguing. According to the e-Trade, the hackers gave the bank name, account no., ABA and stated that the owners are us although in reality the owner of the account is not us (as we learnt from the Bank). The question then is how could e-Trade transfer funds without checking + we never had an account with that bank and also we never got a penny wired out of this e-Trade account since it was opened 8 years ago !!!
Looks like e-Trade employee made a big goof and we are paying for it, or it is an inside job but they are not admitting and are not giving our money back + they keep sending the monthly statement as if no fraud occurred on this account !!!!!!
It will be nice to hear from folks who had problems with e-Trade so that we can collectively go after them.
Looking forward to hearing from you all.
 
We know that the owner of the account is not you. The more important question is, was the name on the bank account the same as yours? If not, and it is E*Trade's policy not to transfer money to an account that does not have the same name and title (as is now required by the industry's AML regs I think - can someone verify?), then you would seem to have a good case for them to make you whole again.
 
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