Suit filed against Ameritrade for slow execution
Suit says Ameritrade was too slow
BY STEVE JORDON
WORLD-HERALD STAFF WRITER
A telecommunications company has filed suit against Ameritrade Holding Corp., alleging that the Omaha online brokerage caused losses by carrying out stock trades too slowly.
Telco Group Inc., of Flushing, N.Y., had filed the complaint in New York in April, but it was transferred this month to U.S. District Court in Omaha.
An Ameritrade spokeswoman said Wednesday the company does not comment on pending litigation.
Telco said it had placed orders to buy or sell stock through an Ameritrade account, expecting the orders to be carried out within a few seconds as Ameritrade promised. But the orders were delayed, sometimes for more than an hour, and as a result the prices were less favorable, the lawsuit said.
In one example listed in the lawsuit, Telco placed an order to buy 175,000 shares of NASDAQ stock on Jan. 7, 2004. The high price when the trade order was received was $37.54 per share, while the low price was $37.53. The transaction was received at approximately 3:05 p.m. but was not executed until 4:20 p.m., according to the lawsuit.
"As a result of Ameritrade's failure to process the trade promptly and at the best possible price under the circumstances . . . Telco lost $26,250," according to the lawsuit.
Trading delays violate Ameritrade's contract with its account holders, Telco said, asking the federal court to declare the lawsuit as being filed on behalf of all Ameritrade account holders as a class and to award damages of $100 million or more.
Another class-action lawsuit against Ameritrade is pending.
That lawsuit was filed by David Zannini of Angier, N.C., and three other Ameritrade customers who said the glitches in Ameritrade's online system were caused by "antiquated and inadequate systems and an insufficient number of employees" to help customers make trades.
That action is pending in Douglas County District Court.
The dismissal of another class-action lawsuit against Ameritrade is on appeal to the Nebraska Court of Appeals.
That lawsuit was filed by Mitchell Green of Los Angeles, who agreed in 1998 to pay $20 a month for an Ameritrade service to get real-time information on stocks and options.
His lawsuit, however, alleged that the information on the options - agreements to buy or sell a stock at a certain time or price - was "stale."
Douglas County District Judge Gary Randall recently ruled that Ameritrade's promise to make "real time" trades did not amount to a contract with its customers.
Suit says Ameritrade was too slow
BY STEVE JORDON
WORLD-HERALD STAFF WRITER
A telecommunications company has filed suit against Ameritrade Holding Corp., alleging that the Omaha online brokerage caused losses by carrying out stock trades too slowly.
Telco Group Inc., of Flushing, N.Y., had filed the complaint in New York in April, but it was transferred this month to U.S. District Court in Omaha.
An Ameritrade spokeswoman said Wednesday the company does not comment on pending litigation.
Telco said it had placed orders to buy or sell stock through an Ameritrade account, expecting the orders to be carried out within a few seconds as Ameritrade promised. But the orders were delayed, sometimes for more than an hour, and as a result the prices were less favorable, the lawsuit said.
In one example listed in the lawsuit, Telco placed an order to buy 175,000 shares of NASDAQ stock on Jan. 7, 2004. The high price when the trade order was received was $37.54 per share, while the low price was $37.53. The transaction was received at approximately 3:05 p.m. but was not executed until 4:20 p.m., according to the lawsuit.
"As a result of Ameritrade's failure to process the trade promptly and at the best possible price under the circumstances . . . Telco lost $26,250," according to the lawsuit.
Trading delays violate Ameritrade's contract with its account holders, Telco said, asking the federal court to declare the lawsuit as being filed on behalf of all Ameritrade account holders as a class and to award damages of $100 million or more.
Another class-action lawsuit against Ameritrade is pending.
That lawsuit was filed by David Zannini of Angier, N.C., and three other Ameritrade customers who said the glitches in Ameritrade's online system were caused by "antiquated and inadequate systems and an insufficient number of employees" to help customers make trades.
That action is pending in Douglas County District Court.
The dismissal of another class-action lawsuit against Ameritrade is on appeal to the Nebraska Court of Appeals.
That lawsuit was filed by Mitchell Green of Los Angeles, who agreed in 1998 to pay $20 a month for an Ameritrade service to get real-time information on stocks and options.
His lawsuit, however, alleged that the information on the options - agreements to buy or sell a stock at a certain time or price - was "stale."
Douglas County District Judge Gary Randall recently ruled that Ameritrade's promise to make "real time" trades did not amount to a contract with its customers.
