Imagine waking up one morning, logging into your online investment account, and discovering that an unknown person had accessed your account and opened a series of new, illegal, naked short trades that were diminishing in value by thousands of dollars per day.
Now imagine calling your brokerage to report the unauthorized access, only to be told that the Firm had intentionally opened the new discretionary trades in your non-discretionary accounts, allegedly to “hedge against further losses.”
“It was unbelievable”, said Ron Taylor (not his real name due to litigation), a self-directed Options trader who had accounts at Thinkorswim by TD Ameritrade. “My own brokerage was trading against me, inside my accounts! They even had to override their system’s safeguards in order to open the illegal trades.
The employee who opened the new trade positions was Peter J. Klink, the Firm’s purported Risk Manager. “There was no way this guy could have been ‘hedging against further losses'”, Taylor said, “…because the Options Pricing Models were projecting that Mr. Klink’s trades would be diminishing in value by more than $3,000 per day, based on the passage of time, exclusive of which way the market moved.”
Below are actual screenshots of the values of the positions in Taylor’s account:
(Click on the images for a larger view)
“My account balances were spiraling downward. I was frantic”, Taylor said “I called Thinkorswim at least four times that day, and each person I spoke with was more rude and condescending than the others. When I asked one of them to roll my long options to a later expiration date to take advantage of the roll yield, he barked to me, ‘listen, I got other things to do…I don’t have time for this sh*t’ and hung up.”
“By the third day, my account balances were plunging even faster. I called senior officers at Thinkorswim, but they all insisted that if I didn’t cover the losses already incurred (as a result of Mr. Klink’s tampering) they would simply trade my accounts as they saw fit”
Taylor called FINRA and asked them to stop this crime in progress, but FINRA said they did not have the authority to order the broker to take specific action.
“What??!?”, Taylor exclaimed, “The Financial Industry Regulatory Authority has no authority over the firms it is regulating??!? This is absurd.”
At the end of the fourth day, Taylor’s accounts were down by $78,550, yet Thinkorswim refused to close the illegally-opened positions until Taylor sent in funds to finance the losses already realizied.
This continued for nearly six weeks, at which time Thinkorswim finally closed the last of their illegal trades at a net debit of $185,000. “Bam! Just like that. What had taken me a lifetime to build was wiped out by arrogant, rude, un-informed traders who knew what they were doing was wrong but did it anyway.”
RON TAYLOR’S ADVICE TO ALL THINKORSWIM/TD AMERITRADE CLIENTS:
“Your investment funds are NOT insured; FINRA does NOT have your back; and TD Ameritrade can, and will do whatever they want. Their Asset Protection Guarantee is no more than an empty promise designed to lure you into depositing additional funds that they will eventually find a way to take..”