18 December 2017
visit www.ebaday.com

Ameritrade accused of delaying orders

11 August 2005  |  10861 views  |  0 Ameritrade

US discount broker Ameritrade has been accused of costing investors millions by delaying orders to buy and sell stock on its online trading system, according to an Associated Press report.

According to the report, a class action lawsuit has been filed in the US District Court by New York telecoms firm Telco Group on behalf of all Ameritrade customers since April 2000. The lawsuit alleges that the Ameritrade system, in one instance, took more than an hour to execute a trade, costing an investor more than $26,000.

Max Folkenflik, lawyer for Telco Group, claims that some trades "were delayed by hours". He says Ameritrade had advertised that the average time to execute all trades from August 2003 to January 2004 was less than three seconds, according to the AP report.

The AP says an example listed in the lawsuit shows that Telco placed an order to buy 175,000 shares on the Nasdaq Stock Market on 7 January 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 pm but was not executed until 4:20 pm, when the shares were trading at $37.68 per share. As a result of the trade not being executed promptly and at the best possible price, Telco lost $26,250.

Ameritrade has so far declined comment on the lawsuit.

According to the AP report, another class-action lawsuit against Ameritrade is pending. The suit was filed by four Ameritrade customers who claim glitches in the firm's online trading platform were caused by antiquated and inadequate systems and an insufficient number of employees to help customers.

Ameritrade said in June it was acquiring rival broker TD Waterhouse in a $3 billion deal. The merger will make Ameritrade the world's largest online brokerage by daily volume.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

E*Trade to acquire HarrisDirect for $700m

E*Trade to acquire HarrisDirect for $700m

08 August 2005  |  6135 views  |  0 comments
Ameritrade and TD Waterhouse confirm merger talks

Ameritrade and TD Waterhouse confirm merger talks

31 May 2005  |  5820 views  |  0 comments
Ameritrade says not for sale

Ameritrade says not for sale

12 May 2005  |  8000 views  |  0 comments
Ameritrade incurs $10 million margin trading fine

Ameritrade incurs $10 million margin trading fine

12 March 2004  |  4680 views  |  0 comments

Related company news


Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comvisit www.response.ncr.comvisit http://cib.db.com

Top topics

Most viewed Most shared
satelliteRipple completes XRP Lockup
11307 views comments | 3 tweets | 4 linkedin
Banks tap Ethereum smart contracts for MiFID II complianceBanks tap Ethereum smart contracts for MiF...
10367 views comments | 21 tweets | 26 linkedin
Banks and fintech startups join forces on blockchain-based supply chain pilotBanks and fintech startups join forces on...
7817 views comments | 19 tweets | 22 linkedin
Digital banking startup Loot secures £2.2 million seed roundDigital banking startup Loot secures £...
7557 views comments | 5 tweets | 11 linkedin
Nordea takes Open APIs into live productionNordea takes Open APIs into live productio...
7457 views comments | 6 tweets | 26 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job