I didn’t hear of any exceptional April Fools’ Day jokes this year, but this one caught my eye. Many customers of Zecco Trading logged into their brokerage account yesterday to be greeted with a slightly higher buying power than before… on the order of 6 to 13 million dollars! Thanks to reader Nick for the tip to check my balance. Here is a user-supplied screenshot:
Well, that’s one way to qualify for the Zecco free trades! People on the forums speculated whether this was a April Fools’ Day joke, or a system glitch. They joked about making a big ACH transfer and quitting their jobs.
However, one brave/foolish person posted that he actually put in an order to buy a million dollars worth of shares with their newly found money, and the order was executed! The bad news? The shares were quickly sold later by Zecco… at a market price loss. On top of that, they were charged the $19.99 commission for a broker-assisted trade. Doh! If it was indeed an April Fools’ joke, it definitely wasn’t implemented very well…
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I noticed I had over $6 million dollars of buying power when I logged into my Zecco account yesterday. I wasn’t about to try to use it though. When I logged back in later they had a message stating that buying power might be showing incorrectly but mine was showing the correct amount by then.
Um, I’d definitely call customer service and get that charged reversed. While obviously the money wasn’t his they did lure him into playing with it. I’m sure they’ll argue it was a system glitch and that they aren’t responsible.
I wonder if it was a joke too. I have a feeling even if it wasn’t they will try to say that. I have logged on to my account before and it said something like -1 million dollars. In fact I have had my account add my market value, Cash Balance, and Buying Power in many different ways that were incorrect. I am not sure what does it. But the next day it will be back to normal. Yesterday my account said 12 million again and I just thought jeez its messed up again.
Maybe 2 days ago. I couldnt log on to my account for maybe 20 minutes from 9.20 to 9.40. I am just kind of frustrated with Zecco.
I am thinking about switching over to Options House to give it a try. Anyone had experience with them?
ROFL! Hilarious on all accounts.
And the guy who made the million dollar trade is a genius! Zecco, however, is dumb as always for actually allowing people to trade with this money.
Not to mention the screwed up account balance would have irked me a little bit if I was trading that day.
Miss M,
The guy who purchased the shares, should be hit with more than just the commision. Just because you’re system is glitched does not mean you can be ‘tricked’ and use the money and get away with it.
This happened to a co-worker of mines nephew who Commerce bank accidently deposited 2 million in his account, intended for a person with the same name. He ended up being charged, but I beleive he got away with it and gave back most of the money, but got away with spending a couple hundred thousand. He knew what he was doing the whole time, and knew it was wrong so I don’t think it is right that he gets no punishment for his behavior.
Finders keepers laws are if you find over $5000 you must take action to return it to the owner or hold onto it without using till the owner comes looking for it. There’s a story of a man in Philadelphia who found a money bag from an armor truck laying in the street, he did everything to hide the money and ended up going to jail.
Call this an April fools joke or what, probably some juvenial in the company playing a prank. Hopefully it did not cost the company too much liability with people thinking it was now there money and using it to purchase shares.
This sounds like it must be seriously illegal! That is a very dangerous prank, especially these days!
I was one of those “unfortunate” customers at Zecco that had an unusually high buying power.
I logged in on April 1st to check my orders only to find my buying power shot up to over $6 million! I had a limit order I put in a few days prior that would not go through and ended up getting canceled. My REAL buying power would have covered the trade, but I still could not make any trades.
I had to call customer service to get my account cleared. My guess is they locked the system up, forcing everyone to call and clear their account of the excess millions in their buying power.
Confiker virus mayhem?
Oh well, for one short moment I thought I was a millionaire…
Yes, the guy has a legal suit against zecco. But the only issue is that its the “buying power” which they increased. So if he has a margin account, technically he still doesn’t own that money.
Regardless, he has a suit… in fact a class action suit. Such jokes are irresponsible, and deemed a breach of fiduciary duty. Zecco needs to be taught a lesson. People kill themselves (and others) over money. This is no way to kid around.
I should clarify, it becomes a good case because we now know it was a prank, and not a system glitch.
Just for clarity regarding NY Guy’s comments. The law of finders can generally be expressed as: “The finder has a good claim against all but the true owner.” There’s virtually no concept of finders-keepers in the law. Further, rules about reporting a find differ by jurisdiction. Before taking any action consult the law in your area.
I agree with NY GUY in that those who actually tried to use the extra money should deal with whatever consequences resulted from their actions. It is completely unethical to act as if that money is yours. To me, this unabated greed is what led us into our perilous financial situation in the first place. Why is it OK for individuals to indulge in this greed but when corporate America does the same thing everyone brings out the pitchforks and torches? Ethical business practices will not be strengthened if the general populous does not practice what it preaches; the double standard is pretty apparent.
On another note, I am a software developer and I sincerely hope this was a bug in their code. I find it extremely hard to believe that rather than just displaying a bogus amount they would actually modify the account balance. If this was indeed an April Fool’s joke their implementation was appalling and I fear for their customers as it seems their development team has no idea what they are doing.
It was a mistake. The guy who bought stocks using this money is lucky the market didn’t crush between the time he bought the shares and Zecco sold them. He could’ve been responsible for more losses than what he can ever hope to repay.
Also, if you notice, the account value is still $2334. “Buying power” includes the amount he can borrow i.e. when buying on margin. Obviously borrowing this much with that little in assets doesn’t satisfy margin requirements, but this is probably where the computer mistake was. By executing a trade he simply bought stocks on margin with the broker’s mistake allowing to borrow too much.
He could have lucked out though. What if the stocks gained value between the time he bought them and the time Zecco sold it? He may have been able to keep the gains. The article above is not clear if he was responsible for losses, but the forum posts appear to imply that he was and that he was lucky it was a reasonably good day for the market so the losses weren’t huge.
I wonder what would’ve happened if Zecco hadn’t noticed it for a few days? Would they charge him margin interest before issuing a margin call and liquidating the full account to pay for losses? I’ve never traded on margin so I don’t know all the rules. Specifically, if you don’t have enough assets to satisfy margin requirements immediately would the broker disallow the loan or would he allow you 3 days to deliver additional funds?
Looking over the forum – it seems a few people did some trades. Some chickened out and canceled immediately, but a couple went ahead and bought a million shares of AIG or City or FCX. Enough people doing it and it could’ve influenced the markets.
I don’t know why you guys are attacking the guy like that… It’s not like he tried to withdraw the money. I can totally understand the curiosity to play around with it just to see what happens. Now if he withdraws the money, sells everything, move to Florida and buys a house there, then you can criticize him for being “unethical”.
However, I am concern about the safety of their platform and experience and accountability of their staff.
I tried to switch from TD Ameritrade to Zecco a while ago. Their insanely cumbersome signup and initial funding process drove me away. I decided the headache wasn’t worth saving $9.99/trade the TD charges. Plus it was my goal to start trading _less_ and buy Index Funds ETFs instead.
I’m so glad I did not move to Zecco now. I can’t believe they’d make a mistake like putting 7 figure deposits on customer accounts. Sheer negligence. Meanwhile the TD website is always up, easy to use, easy to fund and I always get a knowledgeable human being when I call customer service (which I rarely need to).
I agree with Jim. The man in question didn’t try to transfer the money to his bank account and cash out, he just thought “I wonder what it will say if I put an order in for a million shares of ___”.
I am disappointed with Zecco. If this was a prank, I don’t know that I want to trust my savings with a company that will joke around and play games with it. If it was a glitch or a prank played by a rogue employee, then shame on them for not having proper review procedures in place for code before it is placed on a production server.
So how much did that guy end up losing? That’s messed up!
Zecco made a big mistake,
-1>System bug totally resposability of Zecco to increase the Buying Power
-2>Some times Zecco suspend the access to trading center, horrible but sometimes happen, Why Zecco don´t suspend the access if they note that BIG error? and the error appear before market open!
-3>Zecco have the all responsability to let this orders pass, i read in zecco forum possible trades for over $11 million was traded in NYSE!
-4>April 1!, Fools day!, mayor of the zecco account owners are newbies (don’t understand exactly how the systems work) many think thats was a joke and some make orders thinking thats are simulated
-5>If some ones made trades, and liquidated it same day zecco recover the money, so I know Zecco charge at his people the cost of trade, so if they have profits is for the customers.
Well, I don´t think zecco can win a litigation against newbies customers, Zecco must be say sorry to them and go on.
I’ve had a Zecco account for several months now, and while I’m not as active with my trades since they raised the minimum for free trades, I also tend to have other problems with them from time to time. A current issue is that I’m not sure they’re paying me all of my dividends, and I thought I’d post this and see if anyone else might have noticed something similar. I still don’t believe they’ve paid me a dividend from a couple of months ago, and I’ve e-mailed them about it, and I have yet to get a response. I know that I got another dividend about a month after it should have posted once, so I thought maybe that happens sometimes, but I’m going to call and get upset with someone if they don’t respond. Anyone had any experiences like this?
Brett,
I kind of feel the same way. I know I should have a dividend he3re or there but it real hard to look up in the system. Please post back if you find something back.
Brett and Carson,
I used to think my dividends were getting delayed, but then I realized that the payment date is often about a month after the ex-dividend date. Are you looking at the right date to determine the payment of your dividends?
Zecco sucks. I had an account there and the service and web-site are atrocious. Many times I couldn’t even log on. Better off going to a real broker and paying the commission.
Years ago, my account statement in Cincinnati with Fifth/Third Bank showed more money than it should. Hmmm. Yes, well, their rules cut both ways.
In the legal statement on the back, it clearly stated “If no error is reported within 30 days, the statement shall be considered valid.”
Should I have done their work for them? I didn’t touch that account and the next statement still indicated the wrong amount.
“I tried to switch from TD Ameritrade to Zecco a while ago. Their insanely cumbersome signup and initial funding process drove me away. I decided the headache wasn’t worth saving $9.99/trade the TD charges.”
I was considering switching, but I like TD Ameritrade. I think I’ll stick with them.
Personally, though, if I had millions “available for trading”, I’d call them and ask. I’d be afraid to trade it because it might mean I’d be borrowing money and may lose more money than I have.
This is a serious, serious issue. When it comes to money, you can’t joke around. Think about the liability that they’re causing themselves by doing this kind of feat. Whether it was a ‘system glitch’ or not.. That just removed every last drop of credibility and respectability in Zecco.
If one day, Scottrade showed their account holders having 1000x the buying power in their account, they’d be sued into the ground. Zecco is trash.
Whoever thought that stunt up, should be fired.
Once I logged onto my futures trading account and saw that it had gone up from about 5k to about 620k. I emailed my broker, saying that I was pleased with the performance of my account but now I would like to withdraw the money. He wrote back asking if I was going to give him a percentage. I replied 10%. The error was caused when I entered an S&P trade and somehow the close showed a Nasdaq figure. I have no idea how the contract was switched. I did not believe that there was any chance that I could take the money out of the account.
I use the banks trading system for the reason of accountability and responsibility (Canadian bank). You get what you pay for. I sure wouldn’t pay for any Zecco services or trust them with my money. But then again they set a precedent so next time if the stock gains Zecco should pay. And why broker fee? Are the fees not because of a professional doing the actual trading? Broker doesn’t seem to be earning the fee on this one. That is one fee I would argue.
I had 13million buying power for the day and tested out a 5k trade… Executed. I couldn’t believe it. I was nervous but also thinking it was the opportunity of a lifetime to pull a Rothschild. I knew that they updated their accounts at 11am so I had 1.5 hours to make as much as possible. I emailed a couple of folks trying to get “hot” stock picks but no one had any. The stock I purchased for 5k started going down so I got scared and sold. I’m pretty sure I would have been able to keep all gains. I sure did get to keep all losses…
P.S. Don’t do what I did… Very very very dangerous…
I’d guess this was one of the Techs playing a joke on everyone rather than an ‘official’ april fool thing.
Does not make their security/accountability look very good if one employee can do that though.
Has it been confirmed that this was actually an april fools day joke as opposed to some sort of glitch? The comments on consumerist seem to lean away from it eing a prank.
Wow. I could understand if they used a fake landing page that redirected to an April Fool’s Day message when someone tried to execute a trade… but making it live? That’s just asking for a lawsuit.
And if it was a system glitch… well, that just lowers my opinion of them.
I’m currently building a case against my online broker in Canada (Courtage Direct Banque Nationale) because I had a similar problem with them last October. I had been trading with money I thought was in my account, not validating the individual amount of each positions I owned against the margin, only to find later that I actually had not enough money to cover even the slightest loss, the buying power was all fictitious. I had no marginable position. In the end, they force-sold all my positions and I ended with an account in negative of a few thousands, instead of a real positive balance of a couple of thousands prior to the glitch. They said they tried to contact me, but I have no trace of those calls. Anyway, that week I was sick, and spent most of the time in bed… They decided to sell everything. All there was in the account. But If they had waited just the end of the day to start selling I would have owed them nothing. And if they had waited the next day I would have made a lot of money. Now I have to build a case against them, because they say I was responsible for all the actions in my account. I’m responsible for what I buy, but I’m also responsible for the losses resulting from the actions they took, without my consent, without my knowledge. The only time I knew something was wrong was when they sold everything, starting with the position that incurred the losses, then everything I owned. Now I have nothing left and I need to take legal actions against a bank. They took everything like if it was theirs. I’m like David against Goliath!!! I have fun!!!
Interesting post. I had a similar situation with Noble Trading. On the morning (very early) of April 1, 2009, account balance read $6,839,590.83. Tempted to make a trade and/or close account, but by the time the market opened, all was back to correct amounts. So this was not limited to Zecco is my point.
Further investigation is definetely warranted.
Be careful with Zecco. In two separate months they charged me margin interest, though I made no marginable trades. The second month (Feb 2009), there was NO activity at all & they charged my account interest as well as issued a margin call! Only 20 cents worth but still very scary.
I transfered out to TradeKing. (So far, this was an easy application & quick transfer process. But option trade executions seem to be very slow)
There are plusses and minuses, the big minus is that yes, zecco for whatever reason can’t keep track of the numbers worth anything, so make sure you know the rules like the back of your hand.
That is also the plus, their system sucks at calculating so you could really take advantage. There were a few times when i made a few round trips with my money (25k and over) and the buyer power just kept accumulating through out the day. At one point my Buying power was around 450k with only about 50k cash in the account. Ah.. zecco.. i guess you get what you pay for.
I’ve been trading with Zecco for quite a while now but I’m starting to get leery of it. Almost daily, I run into situations where their metric data (Volume levels, daily high/lows, etc) on a stock is way off. When it comes to trading, especially on a daily basis, accurate data is everything. I notified Zecco about this and they shot back some automated response that didn’t even address the issue. The cheap commission is nice, but not if their database is sending you false signals.
Very old story, but I was one of the account holders that made a trade on April 1, 2009 with my new found margin. Got scared when it went through and sold immediately. The trade made money, but I never saw a penny. Zecco closed my account the next day and mailed me my balance prior to the margin trade.