e*Trade Is Starting to Worry Me
For three days I’ve been instructing e*Trade to wire money out of my account and they’ve been giving me a variety of excuses why they can’t make it happen. I’ve never had problems with wires before, although e*Trade correctly points out that this is a much larger sum of money than I’ve previously wired. Apparently the larger amount of money has raised some flags and all of a sudden they’re not sure I am who I say I am. I’ve sent them a notarized letter and gone in person to a local branch so they could verify my bona fides. But they’re still “unable to verify my identity” and my wire hasn’t gone through.
I’m getting worried.
I think this may have something to do with the recent possibility of e*Trade being forced into Chapter 11. An analyst at Citigroup puts the risk at 15%, and his announcement alone could make it a self-fulfilling prophecy by causing a run on the brokerage. It certainly was a factor in my decision to pull money out. I can see where they might have an ulterior motive to keep assets on the books as long as possible, which may explain the difficulties with my wire.
The analyst report has some scary warnings:
If E*Trade doesn’t get significant support in the area of between $2 billion and $4 billion within the next week, or possibly 10 days, they’re going to be in dire straits,” Egan said.
E*Trade reported its first quarterly loss in five years last month and slashed its 2007 forecast because of rising costs for bad debts at the online bank. For the period ended Sept. 30, the company lost $58.5 million compared with a profit of $153.2 million a year earlier.
The analysts are all worried, although some think bankruptcy is less likely:
Mike Vinciquerra, an analyst at BMO Capital Markets, said on Tuesday a bankruptcy is “highly unlikely” because E*Trade has said it can absorb a $1 billion write-down and remain well capitalized.
When I initially put my wire in, they asked me some personal questions to verify my identity (what was the name of the street you lived on fifteen years ago during your freshman summer of college). I got one of them wrong, which is what raised the red flag. Now that I failed their test, they can’t use that to verify my identity. However, I think a more-recent notarized letter (2 days ago) or in-person verification (1 day ago) should trump any “college address” questions they would have.
So here I sit, with a large chunk of money that’s been out of the market for three days. I can no longer log in to my account and most of my phone calls are not being returned. Nobody in their security department will take responsibility for getting the wire out and my calls to their executive offices just get forwarded to the security department. The security employee responsible for my “case” has been too busy to talk to me. The people I *can* get on the phone won’t help me and (get this) they refuse to transfer me to a manager because they are unable to verify my identity.
As I see it, my remaining options are to open up a new brokerage account and attempt an ACATS transfer or hire a lawyer and sue them.
I’ll let you know how it turns out.
John Doe said,
November 16, 2007 at 6:37 am
You need to get a lawyer immediately. DO NOT WAIT!
Unfortunately, you have no other options right now other than legal ones
since you have been locked out of your account.
Let me tell you my own story. (My email address is fictitious since I don’t want
Etrade to know I posted here). I had an account at Etrade with a high six figure balance that I used for margin trading. Etrade was also easy to use to buy preferred stocks, corporate bonds, and some mutual funds. I was warned this past summer by a friend that they did not like the looks of things at Etrade and suggested I either move my money or set up escape plans. In the following week I looked into money flow avenues and decided to link some checking accounts with my Etrade account and moved money back and forth to practice. No problems.
After the news on Fri, I knew I was leaving. First thing Mon morning I sold everything and attempted to move $100,000 to each of my checking accounts. Those orders were rejected because it was a bank holiday. I rescheduled both orders for Tues. On Tues both were rejected because I was not allowed to move more than $100,000 per day (the rule HAD been just last week that it was $100,000 per day per bank). I rescheduled one order to move
money and that went thru. I tried to schedule another order yesterday and the computer told me that I could not schedule another order since I was limited to one $100,000 transfer at a time and my other order was listed as “in process” even tho the money was already in and available from my checking account at my local bank.
Take careful note that I never called Etrade. My account as of now may have been flagged and I may receive a call tomorrow that they “need to verify my identity” but at least $100,000 is out.
You need to get a lawyer NOW and put pressure on Etrade.
This comment is not meant to defame or libel Etrade and is meant for entertainment purposes only since it a parody and/or satire. This post is
also not meant to encourage others to remove their money from Etrade
or in any way harm Etrade’s business. Reading this post implies your
consent that you will not take it seriously in any way nor hold me
responsible for any behavior that negatively affects Etrade’s business
or reputation.
Matt Abar said,
November 28, 2007 at 10:27 pm
My ACATS transfer completed this morning and my e*Trade account is now closed. Since the market has been down, I didn’t miss out from having a large amount sitting in cash for two weeks. During the entire two weeks, their person in their security department responsible for my case did not call me back.
WealthFly » e*Trade Dodges Bankruptcy said,
December 5, 2007 at 3:45 pm
[…] closed my e*Trade accounts two weeks ago. I wasn’t planning on it but they wouldn’t put a large wire through (or allow me to trade it out of cash). I got fed up and transferred my account to another […]