SCOTTRADE NO BUY ORDERS:
So, there has been a great deal of complaints regarding Scottrade's no buy orders on a multitude of penny stocks, while I have not found the same frequent occurrence that happens with any other platform. I called to ask if they understood that by only allowing selling pressure to be exerted on the stock, it is resulting in a biased trading practice that perpetuates the NSCC illiquid costs. They simply do not care, and only offered 3 free trades. I, personally will be sending reports to the SEC and FINRA, and they can evaluate the reaction of stock price after Scottrade's imposition of no buy, sell only orders for Penny Stocks. I then even offered Scottrade a few different ideas to help keep business:
1. Create a penny stock/ otc market account specifically, with a higher flat trade fee (similar to etrade), so they can spread the costs among customers that want to trade in these higher risk markets.
2. Offer to pass the expense on to the customer to allow a forced buy in, depending on what the customer wants.
3. They need to place a hold on stocks that have no buy orders, instead of allowing it's customers to sell the price of a stock farther down, without allowing any opposing force within Scottrade's customer base.
Their response to this:
We reserve the right to delist any stock, and all other trading platforms do this (except no other platform has had these issues lately). They also explain this is covered in the member's agreement, so nobody has any way around it. We can offer up to 10 free trades, but they don't work for penny stocks.
They also refuse to allow members to speak with their trading department. Members are only allowed to contact the customer support people that end up being quite rude.
For all those that want to trade Penny Stocks more freely than offered by Scottrade at the moment - I would suggest opening a different account. I have already had quite a few people that are rolling entire accounts out of Scottrade, just because of their inflexible and biased trading practice.
The first censure by the SEC and ordered consultant investigation, to me, is merely a precursor of things to come. I believe, based on Scottrade's neglect of protection of their customers accounts, failure of prompt and accurate reporting, and now biased trading practices running rampant, that Scottrade is set up more a multitude of law suits forthcoming. I no longer have any faith in this company, and advise a word of caution to all those that are interested consumers. If you want a company that is going to cater to it's customers trading requests and evaluate company policy to do so, then this is NOT the place for you. I wish you all good luck, and happy hunting. Above all, be careful.
