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Something stinks with Zecco/Penson...
I tried buying a small amount of a company that is a OTCQB, and fully reporting (files their 8Ks, 10Qs, 10Ks, etc. with the SEC).
When I called to find out why the stock was restricted, a Zecco rep first told me that it was because it was non-DTC eligible. When I told her that it was not on their list, she then said it was because it's a low volume stock. I pointed out that it's not a low volume stock. So she then said it was their "internal policy" to restrict trading in "this type of stock". She still could not explain the reason.
In short, the rep could not give me a valid reason for their restriction on this particular stock. In the end she just said that they could restrict any stock "at their discretion."
I'm really beginning to suspect that Zecco and/or Penson have other reasons for not allowing buying of certain stocks. And it has nothing to do with protecting their customers.
eTrade has put into place processing fees on transfers as well, and does have some added fees for penny stocks that are trading in gray markets and caveat emptors (just like Penson)...so, do your own DD. You're screwed either way and you shouldn't have traded non-registered securities in the first place.
Maybe they will, but for now eTrade is safe and Penson brokers such as Zecco will screw you in any way they can (certificate processing fees passed to customers, order sizes bigger than 10% 20-day Average Daily Volume REJECTED rendering illiquid stocks UNTRADEABLE and so).
Ah, and idiot is that who says idiocies. I speak facts.
Yes, that'll be interesting.
I read something interesting from OTC Markets Group. Basically, they are working with FINRA and the SEC to file to become an Alternative Trading System. If that happens, that may better protect those companies that share in one of the three tiers using OTC Link. Of course, you crazy people that still trade grey pools and caveat emptors will still be up a creek, but that's another issue.
I think enough companies will get hit by the DTC and the DTC is going to end up with a heck of a lot of companies banding together for a class action suit against the DTC for the damages they have done to investors and companies a like are very large
You can buy pennies that are registered and reporting. Basically, you want to look at their Qs and Ks and see if they are properly registered. Then, you want to make sure they aren't on the DTCC blacklist.
Yosako is an idiot, don't listen to him. These restirctions are going to eventually hit all brokerage houses if DTCC has its way.
Do not try, unless you like aspirin cos you're going to need lots of it. Go with eTrade.
Will zecco allow me to purchase any penny stocks that have Dtcc issues or will the trade be blocked?Have not traded for about 2 years,no probs back then. TIA
By screwing investors? If the companies are scammers, the DTCC are directly gangsters.
Thanks for the info.
Newly
My account has officially be locked for commenting on Zecco's social community. Rage against the machine!
I'm with three other brokerage firms and none of them had this problem whatsoever. This is because Penson fucked up their system upgrade and failed to manage their IT projects correctly.
Ahhhh... Maybe it's just that.
1099's are much more complicated this year due to the new IRS rules that require cost basis and wash sale reporting. Lots of brokers are having problems reporting this information accurately.
You have until October 15th to file your tax return .... a 6 month extension is automatically granted on request. I do it every year. It's a simple form but does require an estimate of the taxes owed along with payment.
That's interesting. I wonder what the reason is.
I have the same problem with my broker and I informed them the law says they must provide this info by 1/31/12 and they were not in compliance. I'm not sure who this can be reported to but if you find out, let me know and I will also file a complaint. Perhaps the IRS?
Really ticks me off that now instead of having at least two months to reconcile my numerous trades with what they are reporting to the IRS, which often takes me at least that long to get done, I have only 30 days. I wonder if the IRS would issue an extension on the basis that this info was not available to us in a timely manner?
Newly
Penson fs us over again:
"1099 Tax Form Delay – We are sorry to inform you that the delivery of the 2011 Consolidated Form 1099 for your Zecco Trading account(s) has been delayed by Penson Financial Services, our clearing firm. This impacts both the hardcopy by mail and the online, downloadable version. We now expect the delivery of these forms to take place no later than March 15, 2012. We sincerely apologize for any inconvenience that this delay may cause."
Anyone know who we can report this to?
So has anyone found a place that will accept penny stock transfers i've tried the major ones and everyone said no or case by case usually no.
optionsxpress-NO
Etrade-NO
Fidelity- 3 months later NO
Trying MBtrading now but more than likely no.
It's more like the government trying to save the mass amount of idiots that complain each year about being taken by these swindlers from themselves.
Not true. They're trying--rather too late in the game--to stop penny scammers.
whatever , FINRA and all of them are just the same more crappy companies trying to screw the little guy all there so called fees are Profits they make screwing us all over we are in the technology age computers can do a lot of stuff its very simple and easy but no they all decided we are hurting we did some stupid crap we need to make an extra buck orwhatever it was it wasn't in the best interest of share holders holding stocks in all different kinds of companies they decided to label non dtc and some random hunch that the company might be screwing share holders
DTCC isn't a government agency. Or a regulator of any kind.
I was making good money on them until the DTC got in the way its like the government wanting to save us from our selves ...
Again, you should really be blaming FINRA, the SEC, and DTCC if you don't like the idea of the non-DTC list and harsher enforcement on these stocks.
But, moreover you have yourself to blame for trading non-reporting, unregistered stocks.
Zeccos non DTC list is now over 1468 pages long wow I really dislike zecco https://www.zecco.com/forms/known-non-dtc-eligible-list/downloadform.aspx
you find any ? what about low trades they will accept OTC stocks as long as they are not
OTC Pink No Information
Grey Market
Caveat Emptor
Has anyone tried Lowtrades ?
Anyone found any other company you can transfer penny stocks to ?
So whats the alternative to zecco?
Etrade wont accept penny stocks
Fidelity says zecco is rejecting the trade after 3 months of saying they will get it shortly
what else is their?
Today might be a good day to download everything about your account(s).
Email from Zecco/Penson this evening:
Hey, thanks for your reply, it's nice to know that they can say oops, LOL
In case you haven't seen this board, they can provide a lot of help if needed.
http://investorshub.advfn.com/boards/board.aspx?board_id=470
Thanks for the helpful tips. I was trying those when I checked back with the website one time and there was an apology from the CEO about how the error was causing all kinds of havoc and it was completely on their end. It was a nice change- their taking responsibility in a polite manner.
Thanks again.
You could try going to windows update and under software there may be a root certificate update.
had the problem when I had the wrong date set on my pc a long time ago
Is anyone else getting a message that there is an expired site certificate when trying to access the site. Customer service told me that it was basically my fault- that I needed to go in and make it a trusted site in my security options because every time the cookies are cleared it deletes this. I said it never happened before.
If someone would just take my penny stocks I would be gone.
Thanks Jeffs177.
--XC
I'll tell you what I did to get away from Zecco ASAP. I ended up emailing proof of all of my securities and complete statements from that last 5 years or so from Zecco to J2T. J2T ended up approving me once they were verified. It was a chore, but well worth the time and trouble.
Thanks, Jabird. I tried to transfer from zecco to etrade, but etrade desn't accept penny stock transfer.
I transfered all but one of my holdings to ETRADE and am 1000% happier than with Zecco. No more restrictions. GL
Looks like you don't want to respond to my post.
Yes, they can. It's their call.
How can zecco and penson get away with charging 70-700 dollars per trade and only let you trade 25% of the trading volume avg when you can go to someone like Fidelity and not cost you anything other then the normal 7-8 dollar fee totally penson is taking their share holders to the cleaners
I think if these were really fee's they were getting from stocks being none DTC all other brokers would instantly jump in and charge you those fees so yes I think there should be a class action law suit against them
Any one here want to sue zecco about not allow to sell already owned low float penny stock?
This has nothing to do with microcap regulation based on what I can tell, just naked shorting. Nor, does it involve FINRA or the SEC regulation of microcaps. This is basically the same thing that you can read on Wikipedia: http://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation#Controversy_over_naked_short_selling
Is my reading of this incorrect? If so, you're going to have to connect the dots for me between accusations of naked short selling (and every single time the DTCC has been sued over this, the case has been tossed out) and regulation of unregistered securities.
I instead refer you to this to back up my understanding of the changes going on in microcap regulation: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68474297
locksflooring Member Profile locksflooring Member Level
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Sunday, December 25, 2011 8:45:27 AM
Re: None
Post # of 179
June 22, 2004
DTCC accused of counterfeiting shares
I had heard about Stockgate a while back when the Nanopierce lawsuit was filed. At the time, it looked like a hopeful settlement deal, but now more details have come to light [1].
And what details! This may well be bigger than the mutual funds scandal, which was the biggest scandal of all time as far as I can see. The Nanopierce class action team has 65 lawyers in it! They have (allegedly) uncovered 1200 funds and 150 broker dealers in naked short selling.
Here's how it works. Short selling is supposed to involve borrowing the stock, then selling the borrowed stock on the market, anticipating a drop in price. It's "good" because it moves information more quickly. It's "bad" because someone with a lot of time and money on their hands can just dump the stock and then buy it back at a cheaper price. Like all things valued by people over the age of 12, there are goods and bads in it.
Where it gets egregious is if the stock is not borrowed at all, and simply "sold" on a promise. Now, if you are a big bad player and you can "not borrow" enough of it, and "sell" enough of what you don't have, then the price has to go down. Supply and demand, and all that. Then you can "buy" it on the cheap, transfer a few things around in the accounts, and end up with a profit.
Having the actual stock on hand is supposed to put a brake on this practice. And, when the DTCC - the single depository and clearing agency in the US - set up its stock lending facility, it was quite popular, as it was relatively easy to just borrow the shares from DTCC, and dump them on the market.
All supposing that DTCC had acquired them from somewhere. Now it transpires that DTCC took a fee for this activity, and worked out that they could over-lend. That is, they could simply counterfeit the shares. It's alleged by the lawsuit that DTCC turned off its governance, and turned on the equity tap. Anyone who wanted to borrow, presumably could - even if there were none to borrow.
"The Stock Borrow Program was purportedly set up to facilitate expedited clearance of stock trades. Somewhere along the line, the DTCC became aware that if it could lend a single share an unlimited number of times, it could collect a fee each time, according to Burrell. "There are numerous cases of a single share being lent ten or many more times," giving rise to the complaint that the DTCC has been electronically counterfeiting just as was done via printed certificates before the Crash."
"Such re-hypothecation has in effect made the potential 'float' in a single company's shares virtually unlimited and the term 'float' meaningless. Shares could be electronically created/counterfeited/kited without a registration statement being filed, and without the underlying company having any knowledge such shares are being sold or even in existence." ...
But, says the cunning governance observer, what happens if the price moves against the naked short seller? Surely he's then caught with his pants down? No. Here's the game: DTCC, instead of taking a clearing agency role as they are supposed and covering the particpants, simply refers the dispute to arbitration between the parties! And, they leave an open position book until it has been resolved.
If true, this makes a mockery of governance, regulation, the system, and any sense of investment. What is the point in investing in shares in a small company if the big players are naked short selling it out of existance, simply to transfer wealth from your pocket into their pocket?
The mutual funds scandal was pretty rude - big players conspired with insiders to strip out percentage points worth of value every year. This sort of salami scam works as long as the amounts taken out don't appear too large. 1% per annum is fine ... always remembering that we are talking about 1% of a 7 trillion dollar amount here.
But stockgate is a whole other ballgame, as the Americans would say - here, broker dealers and investment banks were conspiring allegedly to transfer the *whole* value of small companies to them. One expert claims that 7,000 public companies and from one to three trillion dollars have been raided.
[1] http://www.investors.com/breakingnews.asp?journalid=21660437&brk=1
StockGate: London Companies on Berlin Exchange Ask for Investigation, Reg SHO Hearing Reset
Posted by iang at June 22, 2004 07:26 AM | TrackBack
Comments
Even if I don't understand half of the business terms it's still enough to make me pick up my jaw from the floor where it fell.
Posted by: Axel at June 22, 2004 10:13 AM
Yeah, it doesn't just drop the jaw, it sends it skidding out the room...
Perhaps I should explain the context ... Financial Cryptography systems have pretty much solved the problems shown in Stockgate and Mutual Funds scandals. Yet, implementing systems with FC faces huge institutional barriers, not the least of which is that opportunities to make money out of the system's ropiness are somewhat lost.
Meanwhile, scandals keep coming. One estimate of the mutual funds scandal has it at half a trillion dollars, and this Stockgate thing is coming in over a trillion in lost and stolen money. A trillion here, a trillion there, pretty soon you're talking real money.
Posted by: Iang at June 22, 2004 11:11 AM
Further info on the scam has come to light on how the cycle works. I can't be bothered to write the details right now, but it can be basically limited to the PIPE market. This means that the amount raided is probably in the billions, and wouldn't come close to the trillions suggested above by some observers.
Posted by: Iang at June 25, 2004 07:02 AM
How does this get rectified? Who is investigating this problem? What is the SEC doing? Are they even aware of the problem?
John
Posted by: John Valentino at June 30, 2004 12:31 PM
There is only one solution that is "real" and that is RTGS. That won't happen any time soon. In the meantime, expect the system to limp along and hope that nobody gets too greedy, because that's when firms start failing.
The SEC can't do anything, but they are certainly aware of the problem. It's caught between an outraged congress, an apathetic public, the powerful vested interests of trillion dollar money managers, and an impossible mission.
None of that is going to change either, but the real thing that needs to be done is to change the mission, which was some socialist objective set after the crash of '29. Until that happens, expect the SEC to get forced into more and worse regulation, in order to appear to be meeting its congress-mandated goals.
Posted by: Iang at June 30, 2004 12:57 PM
Well, the unreconciled difference with DTC is easily taken care of since the shorts come home to roost eventually. So when they do they can be applied and netted away. It is of course illegal to do this type of operation and many of the technical aspects of how it is done are not clear, nor will they be made clear.
The simple matter that the pump and dump stocks complain about - the naked short sellers - is taking the attention away from their own robbery of shareholders via dilutive transactions that make suspect use of funds like PIPEs.
There is another area of play not taken into consideration which is the Contracts for Difference Markets of London that basically allow synthetic shorts to be placed without regard to US short sale rules or stock loan requirements. I suggest the Deep Throat suggestion of follow the money is the answer; the PIPE transaction, ie convertible debt issuance via a privately negotiated transaction, is the root of the problem since it allows for the closing of the short positions. The average Hedge fund that does PIPEs makes between 10 and 25% on their funds per year and it is a safe bet to make.
Posted by: Jim at June 30, 2004 01:49 PM
The PIPE products and the DTCC seem like separate issues to me. The intelligent course would be to dump the DTCC and find a path to RTGS but I wouldn't hold my breath. Until this happens anyone who invests in Equities is out of his mind.
As far as PIPEs are concerned, any board that makes such an issue should be kicked out, hard, by their shareholders. There's no such thing as governance at the individual firm level either.
Of course the answer will be more regulation. What do you expect when you ask regulators to solve a problem for you? We already have an economy that is floated on fiat currencies; why not go one step further and legitimize the DTCC into a Fed-like foundry for the fabrication of imaginary equity?
locksflooring Member Profile locksflooring Member Level
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Sunday, December 25, 2011 8:42:37 AM
Re: None
Post # of 179
Corrupt Statement by Larry Thompson = The DTCC has fought back by saying the regulation of trading activities is the job of the SEC and the national exchanges, not its own. In a statement earlier this year accompanying the news that yet another lawsuit against it was dismissed, DTCC General Counsel Larry Thompson said, "Short-selling and naked short-selling are trading strategies and are not connected to the post-trade clearance and settlement of securities transactions.”
http://www.forbes.com/2006/10/10/stocks-shorting-dtcc-biz_cx_lm_1010dtcc.html
locksflooring
Sunday, December 25, 2011 8:38:13 AM
Re: None
Post # of 179
DTCC’s Faryniarz Warns of Move From U.S. on Dodd-Frank Concern
October 25, 2011, 12:03 PM EDT
By Eleni Himaras
Oct. 25 (Bloomberg) -- The Depository Trust & Clearing Corporation may move its data outside the U.S. should an American law spur companies in other countries to stop sending it information on trades, an executive said.
The U.S. Dodd-Frank Act, passed in 2010, requires foreign market overseers to compensate U.S.-based trade repositories for legal expenses when shared information becomes public. That will fragment oversight because foreign regulators won’t be willing to pay and may require firms that trade derivatives to report to local entities instead of a global one, Dan Faryniarz, managing director of derivatives market structure and industry relations at DTCC, said in Hong Kong today.
The DTCC, the biggest trade repository for over-the-counter derivatives, collects details on trades, such as their size and the identities of the counterparties, for use by regulators. Forcing overseas authorities to compensate the DTCC for lawsuits that may arise if its data are released will hinder the free flow of information, Faryniarz said during a panel at an International Swaps and Derivatives Association conference.
“A trade repository will just be bits and bytes if it doesn’t have all of the information,” he said. “We will need to look at the idea of moving our global dataset offshore.”
Regulators worldwide are increasing scrutiny of over-the- counter derivatives after their relative opacity was blamed for masking systemic risk before the 2008 collapse of Lehman Brothers Holdings Inc. The market reached $601 trillion last year, according to Bank for International Settlements data.
The DTCC houses a trade repository for credit-default and equity swaps. In May, it won a global contract from ISDA to collect trade information on interest-rate swaps, which make up the largest portion of the OTC derivatives market. All global derivatives dealers and more than 2,100 asset-management firms in 71 countries are linked to the depository, according to DTCC.
--With assistance from Nina Mehta and Matthew Leising in New York. Editor: Joanna Ossinger
To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net
To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net
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