Slashdot Mirror
E*Trade Loses Red Hat IPO Arbitration Claim
mrsam writes: "I was one of the many people who, about a year ago, was picked for Red Hat's
directed share program in their IPO.
Soon thereafter the underwriter, E*Trade,
kicked me out of the program without giving a good reason.
Believing my dismissal to be completely unjustified and without merit,
I filed a claim against E*Trade pursuant to NASD arbitration rules.
For all practical matters, I sued them. A NASD arbitration claim is basically
an expedited lawsuit.
I am pleased to report that I have won my claim. I won damages AND
legal fees. I have put up the arbitration panel's decision, plus some juicy
stuff that my legal eagles have obtained during the discovery process, at
http://www.geocities.com/~mrsam/etrouble/hearing.html. The whole story, from start to finish,
is at
http://www.geocities.com/~mrsam/etrouble/."
I don't see ETRADE as signators to the bill of rights
Well, of course not. They weren't around back then.
Please leave the constitution out of matters that do not concern it. This is one of those matters. How many times must people here be told, the constitution DOES NOT COVER PRIVATE ENTITIES.
Corporations gain from the constitution. They should respect it. Its a personal morality thing.
Those laws are for government use only
No they are not. The Constitution clearly states "We the people of the United States, in Order to form a more perfect Union,"....... It is everybodies responsibility to abide by these laws.
On many IPO's, there is an attempt to restrict the participants to people who have an understanding of the risk of the IPO.
The stock market is designed as a mechanism to efficiently allocate capital to companies, not for day traders. Our system (and most other stock markets for that matter) tends to run into problems with large, rapid orders (see the crash of '87 and the changes to program trading).
People are more than willing to sue anyone, anytime they lose money. I used to work for a small brokerage firm (not as a broker though, so IANAB), and we had a client sue us over investment losses. Despite a signed statement that they understood they could lose money, even their principal. We won, but barely.
These arbitration boards don't always follow the law as you would expect. The arbitrators are taken from the business, academia and the legal profession. All it takes is 1 or 2 arbitrators with a fairly liberal viewpoint and the company is in trouble, even if they've done everything possible to explain to the client the risk. - Ravensfire
"But we decide which is right, and which is an illusion"
Simple, he's smart. You don't get to be rich by paying for something when a free, suitable alternative exists :)
Finkployd
They saw that this was going to be a wildly successful IPO, and wanted to eat as much of the profit as possible, so they came up with a reasonably plausable explanation and a questionaire to go with it. They used the answers on the questionaire as an excuse to exclude a large number of invited IPO participants and keep the shares for themselves. When Red-Hat mushroomed, the sold the the shares themselves and kept the profits.
The nasty thing is: Had the IPO plummeted, they would have probably told Red-Hat that they hadn't been able to distribute all of the shares, and found a way to quietly return them to RedHat.
I dunno about you, but this thing has "Class action" written all over it in my eyes.
`ø,,ø`ø,,ø!
Free Software: Like love, it grows best when given away.
That is true, for a Canadian. Your money-trading regs are slightly different for the Gov't there does slightly different financial system as well as more fingers in the cookie jar.
But in this matter, the selective screeing process that e*trade had was frankly illegal and borderline discrinatory.
IMHO, financial checks are nice, as long as everyone follows the same guidebook set by the SEC or whatever firm that regulates trading.
First rule of holes; When in one, stop digging.
It was a good trade. Fuck a few hundred people, make tens of millions, and be forced to pay back a few thousand here and there to the annoying gnats which actually stand up to their chicanery.
Welcome to the modus operandi of corporate America.
Tech talk is nice, dont get me wrong on that, But tis the squeezin' green that makes the world (and the 'Net) go 'round.
If you read into it a bit further, other clients were being rejected and money-trading rules were being broke.
Cheers
First rule of holes; When in one, stop digging.
Would an attorney charge you $10,000 to give you a CHANCE at winning back $14,000
________
That's false, in this particular context. The stock market is not a coin flip, it is based on the productivity of industry. On average it very much goes up. If your investments on average do not go up, you are doing something wrong and should either learn more or turn your money over to a manager who knows more about how to do it. I'm not talking about getting rich, I'm talking about 10 or 15 percent a year gains.
I honestly cannot understand this type of thinking. You have a free (block the banner ads if it bothers you) service that provides some news and discussion, why can you not just take from this site what you like and ignore the rest.
Why does everyone feel slashdot must conform to their own personal view of what is "geek news"?! Quit being so damn selfish everyone! Just cause you aren't interested in it doesn't mean everyone feels the same way.
Finkployd
> or corporate citizens. There should be no corporate citizen. Corporations have twisted the laws to give them more rights than citizens but as far as your comment goes the bill of rights was never for corporations.
Why do you think he manages to get 125K / year and has 60K in cash ? He just does not spend it on futile things such as webhosting. If you can get it for free, why pay for it ?
Incidently, the richest people on this planet are the ones that save a penny here and there.
You dont (usually) make money by spending irresponsibly (sp?).
Marriage is considered capital punishment for the theft of a goat in some third world countries...
Hal Duston
hald@sound.net
You want to know why this is on slashdot? Because its about the RedHat IPO. If that isn't news for nerds I don't know what is.
Please be advised that this story is all about the Red Hat IPO. Red Hat, is a company that produces a distribution of Linux. Linux is a computer operating system, based heavily on Unix. For more information, you might want to check some website on the Linux operating system.
This is news for nerds, stuff that matters.
There were several stories on Slashdot in the months before the RedHat IPO happened because many active Slashdot users were affected by it. There were several more during the week or two before the IPO due to price changes and E*Trade eligibility issues. There were many more after the IPO actually happened. The RedHat IPO was one of the most widely covered single events on Slashdot during that time. Oh, and did you know that RedHat is a company that makes a distribution of the operating system that this site tends to revolve around?
Gee . . . and you're searching for relevance.
You obviously were not clued into the whole RedHat IPO frenzy on Slashdot. That's okay, but you might not want to spend a significant portion of your time pointing out your own ignorance to the entire Slashdot community.
Ok, how do I get invovled in this now?
I was one of the people that received an email saying "You can get red hat IPO through e-trade". I called e-trade, got a verbal quiz, and then told "You don't qualify". Never got around to opening an account because I was pre-disqualified.
Now I find that there are class action suits, and NASD arbitration reviews. How do I get involved in this?
Michael.
Unless you're a huge investor, the biggest winners in the stock market are the brokers. They win when it goes up; they win when it goes down.
Take a look at the book ``Where Are The Customer's Yachts?, Or, A Good Hard Look At Wall Street''. Or don't. It might make you angry if you think your brokers are on your side.
--
CUR ALLOC 20195.....5804M
And why SHOULD he pay for webhosting when he can get it for free?
Just because you have money doesn't mean you have to throw it away needlessly. Seriously.
People should not be afraid of their governments - Governments should be afraid of their people.
And a good way of bankrupting aggrieved citizens who try to fight the good fight against corporate oppression and fail, due to the overwhelming legal power and influence arrayed against them.
It's been said, and I'm sure I'm mangling this quote, that dictators like unarmed peasants. By the same token, corporate oligarchies like poor workers.
I wish we could separate the notion of a market economy from this corporatist crap we keep seeing nowadays.
Why yes, I AM a rocket scientist!
That's a logical way to look at it, but there's another level of depth.
Resources tend to carry over from generation to generation. Most people end up in exactly the same social class as their father, with exceptions. Therefore, if you are a doctor's son, chances are, you'll have access to a computer, a good private school, safety, etc., and may very well go on to become a doctor.
If you're a janitor's son, you probably have access to much, much less. Getting into college is therefore going to be pretty tough.
Affirmative action was our way to try to attempt to vault blacks out of the classes they had been placed in through discrimination. To some degree, it worked. Probably time for it to end, though.
"Beware he who would deny you access to information, for in his heart he deems himself your master."
Contact the lawyer mentioned at the end of the "I won arbitration" page. Since he has already done the research, he will only have to get your individual records from E*Trade.
I wrote him a letter tonight; if you like, contact me at tonyt@ptialaska.net and I will let you know if he picks up my case.
Or, you can retain a lawyer from your own town, and give him the name of the law firm used in this case. Let the lawyers do the work, since they are trained to twist the rules to your advantage.
Microsoft is to software what Budweiser is to beer.
What is this thread turning into, the Wall Street Gazette? The "well-managed portfolio"? This sounds like my dad...although that's a compliment, I'd rather not talk to him via /.
Pete
We're rootin' for ya
Dave Barry wrote about this too, but I got a letter from a firm stating I was in a class action suit against a bank for the improperly handling of a mortgage escrow account. Upon winning, the law firm received $200,000 for their gallent efforts as public defenders, and we the plaintiffs get $25 off our next loan origination fee. The system really works!
try { do() || do_not(); } catch (JediException err) { yoda(err); }
Although I was not one of the directed shares participants, I was not even allowed to participate in the IPO. I took their online questionaire and was notified that I did not meet the requirements. What requirements?
Believe it or not but geocities is slashdotted. The error message that it gives is that there is no page at this address.
Just keep reloading. It took me about 3 reloads to see the page.
"Do you think we could wipe out world hunger forever if scientists figured out how to make AOL's Free CD's edible?"-
Simple. It wasn't that "open-source" participants were placed into a smaller pool and scrutinized, it was that the FCC requires brokerage houses to obtain background information from their customers under the "know your customers" rules prior to letting them trade.
Like all brokers who handle IPO's, E-Trade required everyone participating in the IPO to have an account with them. The questionnaire is a normal part of opening an account.
This doesn't excuse E-Trade's actions in this case. I'm extremely pleased they had to pay the restitution. But the implication that "open-source" folks were singled out is incorrect.
And you know what? I don't think that's such a bad idea. If we can prevent some little old lady from dumping her life savings into options, why wouldn't we? Risk tolerance is a very important factor in any investment decision, and sometimes non-trained people are not the best ones to analyze their risk tolerance, or even how risky a particular trade might be.
I'm not saying that the RedHat IPO wasn't a sure thing (I think it was, actually), but I've seen general negativity here about know-your-customer rules, and I figured I'd voice my opinion on that.
- In Capitalist America, law violates YOU!
Broker's Rule #1: The Brokers cannot invest into the market itself. PERIOD
This is a cardinal SEC reg to maintain market stability.
RE: being selfish, IF they did do that they would be in even worse trouble and might have lost their license to even operate as part of the market.
And as for being a tech stock that is a OS, i'd say that it is worthy of a long term buy and then play with it.
Yer about right on class action, it just didnt go that far if the SEC didnt take action, in which is VERY rare in matters like this...
First rule of holes; When in one, stop digging.
As someone who also received the letter, they weren't targeting open source developers. They have standard rules for participating in normal IPOs, which usually means having a ton of investing experience and a ton of money. IPOs are very high risk, and they don't want some Joe Schmoe who has no idea what they are doing to invest. Nor do they want day traders investing in an IPO. People applying for an IPO are designed to be longer term traders. The whole purpose is to raise money, not get the money and watch all the shares get sold the next day.
E-Trade's problem, I bet, was they didn't have anything in the system to let people who qualified for the special IPO shares to get to them. Their computer system means everyone had to go through the same crap. Seeing as how they told people over the phone (in not quite the same language, but the message was the same) to lie on the questionaire (which I did the second time around), they probably didn't have any way to override the IPO system.
Hopefully this has been changed now.
E-Trade's practices may have been a little off in this whole situation. However, I talked to too many customer service representatives during the process to think they were targeting the open-source community. Given the fact they were basically telling many of us to lie and doing they best they could with a limited web-based system and the SEC, and dealing with a bunch of developers that probably didn't have much money to contribute to their bottom-line profit, I give them a little credit for being as responsive as they were. Yes, their system sucked. And I was a nervous wreck for 2 days. But most of us got our shares. I just hoped they fixed their process.
Er, they were singled out. The "Friends and Family" participants in the directed shares program didn't answer that questionnaire, and neither did anyone else -- other than the "open source" people. Did you read the guy's page? When asked to cite the regulations they were complying with, they could not.
________________________________________
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
It's gonna be fun watching the old market boys struggling and snarling like dinosaurs sinking in the tarpit while the net traders watch fromt he shore. The old ways are dead. Accept it or die.
Because many of the people who lost out on the trade are regular Slashdot readers. Can you think of a better way of notifying them that there might be something they can do about their loss?
Seems to me that if he cleared 14k in this deal, he made a lot more than he would have if he'd gotten the shares and kept them until now 'eh.
They call me the working man. I guess that's what I am.
No, Federal Law forbids discrimination by a very small set a criteria - not the Constitution.
Discrimination is mostly legal - I can discriminate against smokers, for instance. And idiots who think they know the Constitution but really don't.
As an employer I just can't discriminate on a small, enumerated list of criteria (sex, race, religion, etc).
But I don't hold it against the author for using Geocities. As long as it works I suppose.
Well, although I may be of base, but I figure, if I'm paying for hosting...with, say, metered bandwidth, I don't necessarily want all of the traffic that this story will generate at my site. In fact, I may just throw it up on Geocities to submit to slashdot, while mirroring the same content on my personal site just to avoid the Slashdot Effect. I figure it's a pretty smart way to do it. -fp
It is relevant because a lot of /. readers were exclueded from the IPO just like mrsam was; and the statute of limitations has not run out, so there's still time to file your own claim.
Hello? The brokers own the market.
A company goes to a broker looking to raise capital. To get the company's business, the broker guarantees to sell an agreed upon dollar amount of stock. The broker evaluates the marketability of the company and determines an IPO share price. The company files with SEC to sell shares; if it has any brains, it does not give all the shares to the broker, retaining some for secondary offerings. The broker, meanwhile is drumming up support and making adjustments to the IPO price so that it can make its money back, and then some.
The IPO happens. Either it's hugely successful/oversubscribed and the broker makes money; or, it's flat, and the broker breaks even or makes a few pennys on the commissions; or, it's a busted IPO and the broker ends up holding a lot of unmarketable stock. Whatever happens, the company gets its guaranteed capital.
Needless to say, brokers don't get involved in IPOs they think are going to fail. Depending on market conditions, the future relationship it wishes to maintain with the company, etc., the broker may hold on to some shares or sell them all into the market.
--
Yes, it's true. This man has no dick.
I wouldn't care if Slashdot posted an article on basket weaving. My life would still be the same as it now. Thankfully, they don't, because it's not what they do. The job that they chose was to be a central point for relevant information for technologically minded fellows. They do an awesome job of wading through the mountains of crap they get every day, and providing plenty of good material to pleasantly waste my day away.
:)
I wasn't trying to flame the slashdot crew, so I would like to thank you for responding calmly.
Personally, I haven't yet experienced the "joys of capitalism", since I'm a college student just barely making enough to pay all my bills. You can understand my frustration at some guy making $125k per year thinking he's been screwed. Let me clarify: He was screwed, as well as many Slashdot readers. I'm confident that a class-action lawsuit will be in the works soon, if not already.)
Yes, many geeks are now in a position of making money, that is true. I did not foresee it's relevance to many other readers, and for that I apologize. It shows that Rob and the gang are much more informed than I was, and proves why I'm not much more than a troll...
(P.S. For those of you who've remapped the Enter key on their keyboards to "FLAME", I hate smilies. I only added to show I'm not bitter or sarcastic)
whether you make $10,000/year or $1,000,000.
...dave
Think different? I'd be happy if most people would just think...
However, Philip Greenspun is also a rich bloke who runs the worlds coolest and probably most expensive homepage.
Yours to view at
http://www.photo.net/
Approx cost ~ $1 Million / year
Only two things are infinite, the universe and human stupidity, and I'm not sure about the former. (Einstein)
Anyone who is planning to do business with E*Trade or is involved with E*Trade should think twice.
After the reading the post and remembering a security incident not to long ago about E*Trade, one should investigate whether dealing with E*Trade is a wise thing to do.
-slams
That alone is almost half my yearly salary. And I support 3 kids.. any chance of sharing? :-)
Shameless Plug! If you like trance, tell me what you think!!
And the government couldn't do anything either. I mean, if you make up stuff like "Magnwa's Paper hires editors that rape goats", I can get you for libel :) But otherwise, yes, you are free to start a paper and compete and not suffer any governmental restrictions from it. That's what the constitution is for. It's definatly not for little kids to run around screaming, "FIRST AMENDMENT, you can't punish me for cussing you out!"
Mags
Letter from E-Trade attached:
Dear Sir,
We regret the unfortunate situation regarding your claim involving the RedHat IPO. Although we recognize the NASDAQ ruling, we are unable to issue a cashiers check at this time.
If you log on to http://www.etrade.com/ we have established an account in your name to expedite your future investment of these funds.
Best of luck and happy daytrading.
Ok, we're getting a bit off-base here..
{snip}
E*Trade has repeatedly claimed in the media, and at the hearing (initially), that this "financial questionaire" was "objective" and that it was mandated by some vague and unspecified NASD and SEC regulations. Don't buy that. At the hearing, that argument was torn into shreds. Under direct examination a demand was put to E*Trade to cite the exact NASD/SEC rule that they were blabbing about. The blank stare in response was priceless.
{snip}
Their questionaire was used ONLY for this IPO and their selectiveity was EXTEREMLY selective, not to mention being illegal to Boot!
So the Brokers make the dough, tis great, as long as they play by the rules. That don't mean that they can bend them, but outright violations of NASD/SEC regs will mean disaster to any broker or company.
First rule of holes; When in one, stop digging.
Hey guys...
Is it just me, or are those links dead?
Can't get there...
--- Brian the Wise Friend to Small Fury Animals Everywhere...
Not knowing much about E*Trade's operations, I might just be blowing smoke out my ass. But if I were to suspect a company of a stock scam of some sort here, here's what I would think was going on behind the scenes:
1. offers the IPO publicly, to test the waters.
2. sees who is interested in the IPO. If it's enough people, then...
3. rejects all but a select few to buy stock in the new IPO, and picks up a huge chunk of it for themselves.
4. Meanwhile, they hang onto the money of those people who wanted to opt in on the IPO in order to pocket the interest.
In other words, they hold the carrot out in front of everybody, and if enough people want to nibble, they pull it back and act on it themselves. Basically, they use it to gauge the popularity of the IPO, and if it looks like it'll take off, they shut people out and keep more of it for themselves.
The Internet can be used for polls. Why not turn a stock offering into a poll to see if a stock will take off, and then use that as a sort of 'outsider information'? Okay, I mean beside the fact that it's contractually illegal and ethically reprehensible?
I'm not saying that's what E*Trade did (though reading on in the article in another window, it looks like a good guess). Suffice it to say, that E*Trade did some jiggery-pokery with the stock, the IPO's inital cost, and other peoples' money.
But whatever happened, E*Trade tried it.
And they got caught.
That works for me.
With any luck, the finding against them will keep them from doing it again. But maybe not.
---
You cannot truly appreciate Dilbert until you read it in the original Klingon.
No, thats the point. You only pay more if you paid more in the first place. If you spend $5000 trying to sue someone, and because of a technicality it seems that you are in the wrong, you only have to pay your court costs + $5000. Expensive but probably manageable.
The other options are that that everyone pays their own costs or the loser pays the winner's costs. Paying ones own costs means that even if you do win the case, you might not win as much as you spent. Loser pays costs means that its too easy for a large corporation to intimidate a smaller corporation simply by spending a stupid amount on their own legal team.
don't mod this down cos it looks like a sarcastic comment, it may not look like a real question, but it is. What is an IPO?
Civil dicovery process is an awe-inspiring process. You get everything. But under the rules, are you allowed to publish what you find, or only that small portion that was admitted into evidence? What does your lawyer say?
The slashdot crew can post whatever they want to this website. They craeted it. If you don't like the story then don't read it. Use your common sense. Obviously you didn't read the article because this story is very relavent to slashdot. In the article they talk about how the open source community was targeted for this crap. Who do you think post to this board? Several people have already posted that they were screwed by this deal. People who post crap yelling at the slashdot crew to not post stories should get a life or get off this page. You're as bad as the trolls.
"Can't sleep. Clowns will eat me"
invest in the RHAT IPO right from the start. While Mrsam now has plenty of Moolah, I had some last year, but lost all of my wins during the Corel, Lnux and Rhat debacles between December and April. Had I been kicked as well, I'd have a healthy loot. Well, that's life. One day you win, the next you lose.
Every once in a while, something like this happens.
But look at the cost... something like $10,000 in legal fees were awarded, and the total claim is just over $15,000 (including interest).
I take this to mean that the person who won the claim had to take the chance that he might lose, and be out $10,000... plus maybe legal fees for the OTHER side!
It's not your classic David and Goliath story, but it's nice to see an individual win out over a corporation. It looks like the system works in this case.
--
"May I have ten thousand marbles, please?"
This is rediculous. I am just one of a WHOLE LOT OF slashdot readers who got screwed during the whole Redhat IPO because of the exact same thing. This article definately was relevent!
-----------------------------------------
Oops, my bad!
I meant to say "It WILL be posted again".
Ahh - My eye!
The doctor said I'm not supposed to get Slashdot in it!
IF someone wants to put $50K down on XYZ company and the next day it plunges, fine let'em. e*trade had no reason whatsoever to do this in any way shape or form to screen the investors for this IPO reservation in the manner in which they did. There are credit check regs in place, but this was BS and pure idiocy.
Actualy, i'm pretty sure that some idiots out there are sueing e*trade and some othe day trading firms for letting them lose their life savings. This is also happeneing to a few online casinos. but no matter if they should do that or not, this was a total scam and they were trying to save their ass.
I'm curious, who's in the wrong here? Etrade or RedHat? Was it entirely Etrade's fault that they didn't want they people to get money, or did RedHat convince them otherwise for some reason?
- I don't care if they globalize against free speech. All my best free thoughts are done in my head.
from the the-best-revenge dept.
I don't like to s-s-s-stutter that much, t-t-t-thank you.
---
dd if=/dev/random of=~/.ssh/authorized_keys bs=1 count=1024
the author claims to make >$125K per year, and to have $60K in cash.
If that's the case, then why is he using a free website like Geocities for his stuff? Would paying ~$20 a month for webhosting really be that expensive for him? Seriously.
One rule for getting and staying rich is never to pay for anything if you don't have to! Seriously.
Donte Alistair Anderson Roberts - hi son!
Karma: Chameleon
The answer is not as simple as you make it sound. The question is whether etrade has a questionnaire that it gives to other people in deals other than this RedHat one. That would indicate whether it was the Friends and Family who were singled out, or the open sourcers who were, or if there are always two classes.
yes it does. Private individuals cannot squash your free speech rights. Nor can buinsesses. I find it very hard to believe that you would think that the framers thought the only threat to freedom is from the gov't. I very much doubt they were that short sighted.
"It's not against Federal law to be sleazy and slimy..."
.... Oh, probably better off ... Well anyway.
It would be illegal to be a polition, then where would we be
Not exactly.
Thoese are rights *the people guarantee themselves*.
They seperated out the 600,000 shares (Note: that's NOT the same as the 800,000 shares that Red Hat had indicated on their filing and promised to the world...) that E-Trade claims were sold to through the directed shares program. They seperated them into two piles- one for the open source crowd (That comprised 200,000 shares...) and one for "Friends and Family" (That comprised 400,000 shares...). According to the findings in the arbitration, they only submitted the Open Source people to the scrutiny that we all have come to loathe and hate.
Seems to me that E-Trade DID discriminate.
Oh, and there's nothing that the FCC has to do with the trading of securities or comodities. That would be the SEC. And there's NO SEC regulations other than the "Know your Customer" requirements. Had they followed SEC regs, there'd been quite a few less disgruntled people.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
1) Because they can
2) Because Red Hat *TOLD* them to.
BTW.. the prospectus says they may sell 'up to 800,000 shares', not 'must sell 800,000 shares'. This was at their discretion as an underwriter.
Hypothetical:
I am an editor of a newspaper. I decide I don't like you. I choose not to publish anything you say in my paper. I choose to not allow you to advertise in my paper. The reason I choose not to do this is because YOU like Ford and I like Chevrolet. Am I in the wrong?
NO. First off, I cannot be attacked by the government because of the freedom of the press. SECOND, you have no free speech in my paper. You have no free speech at all. You just simply have the promise that the government won't ever take it away. That doesn't mean you have it everywhere, it simply means you don't have to worry about the government restricting it.
It sounds like semantics.. but it's not.
Magnwa
This MAY sound weird. Corporations are not people. They are entities treated seperately from people. They are , legally, treated as living creatures, but they are not legally people. That sounds weird.. but look at it this way. Does Microsoft get a vote in the election coming up? Does Dell? Cisco? No. They are not the group that the constitution is addressed to or covering. Sure, LAWS are what Etrade broke, and LAWS are what they are bound to.. but they are not bound to the Bill of Rights. Especially not the 5th and 6th amendment. (Self incrimination and trial rights refer to GOVERNMENT RUN TRIALS, not third party arbitration.)
Magnwa
You could do that, yes. You'd be an idiot for refusing income like that, but i'm sure after awhile your paper would be out of buinsess. While i don't have a say in YOUR paper, i could start my own and say my opinion, and if its about how your paper sucks b/c you have no objectivity, well i guess you'd have to live with that. You can't make me stop.
--
314-15-9265
And why isn't it? Freedom of expression is covered. If thats how i choose to express myself, i should be allowed to. Why is it ok for musicians to express themselves that way in song, but for someone to just say it is forbidden? Doesn't make sense to me. Free speech is the right to say whats on your mind.
I doubt it. Probably the reason he used binding arbitration was because that's what e-trade makes you agree to when you open an account. Usually those types of contracts require everyone to go through arbitration separately, so no class-action. IANAL, and this is just one more time when /. could use the advice of one.
Walt
Right. But we don't have the right to free speech. We have the assurance that the government will make no laws concerning our speech. There's a big difference between having the right to say whatever you want and having a government not allowed to hurt you.
Mags
Um, i don't even follow what you're getting at. We DO have the right to free speech, and you're right that it says the gov't can't make laws about it. The purpose of that however is so that we will not lose the right to free speech, b/c if the gov't can make laws about it then it is possible they will try to take it away.
I am curious as to why they placed "open-source" participants into a smaller pool, and scrutinized them specifically. I did not participate, so I didn't see the questionnaire. I wish you could post a copy of it, or at least that subjective question.
Why would E*Trade want to profile open-sourcers? Did RedHat know about this? Where's the 200,000 shares? If they were sold, who made the money?
Their SEC Central Index Key is 0001015780 -- perhaps something enlightening can be dug up in the Edgar database, but I doubt it.
________________________________________
Napster-to-go says "Fill and refill your compatible MP3 player", which is a lie. It's not MP3. It's WMA with DRM.
Any stock trader worth his/her salt knows that if he/she reads AND understands the rules of trading established by the stock market, knows that IF a site like e*trade pulls a fast one, that they can file a complaint agianst them and have it investigated.
Also to note that one of the reasons that e*trade had given for the stunt that they pulled was that "we wanted to keep our clients from making bad investments"
Bull.
IF someone wants to put $50K down on XYZ company and the next day it plunges, fine let'em. e*trade had no reason whatsoever to do this in any way shape or form to screen the investors for this IPO reservation in the manner in which they did. There are credit check regs in place, but this was BS and pure idiocy.
BTW, whatever happened to those 200K shares that went missing off of that IPO? e*trade said that there were 600K. RH's IPO reserve said 800K.
oops... big mistake.
First rule of holes; When in one, stop digging.
It's relevant because it was an IPO many geeks were invited to particpate in. It's relevant because a lot of geeks are in a position that they weren't 20 years ago - participating in the dubious joys of modern capitalism. That sounds penty relevant for me.
You sure are smug for being incorrect.
Affirmative Action applies to *government* jobs and contracts. There are no hiring quotas imposed on private business unless the private business has a government contract. The only thing private businesses have to comply with are anti-discrimination laws. The federal government has never had the power to mandate specific hiring quotas to private businesses.
--GnrcMan--
If that's the case, then why is he using a free website like Geocities for his stuff? Would paying ~$20 a month for webhosting really be that expensive for him? Seriously.
Around these parts brokers are required to evaluate your fitness for a particular risk CATEGORY, ONE time as you're signing up for access to that category. I signed up for an Ameritrade account (which I highly recommend, btw -- they have been nothing but completely honest and affordable) and when I did so I checked the boxes for margin trading and options trading. I have never used either of those high-risk forms of trading in the 2 years I've had the account, but I had to fill out paperwork certifying that I knew the risks I was taking. And they still had to approve it based on my income level, age, and so forth. I'm glad they did so, and it means I can trade options or on margin without someone watching over my shoulder.
--
It's rare that you're presented with a knob whose only two positions are Make History and Flee Your Glorious Destiny.
But they did have to give back some of it. My estimate in what they ended up having to give back (and this was just the Affinity group), was in the millions of dollars. This originally would have gone to mutual funds and their own traders and allies.
To give you an example, I eventually got 100 shares, which turned into capital gains of $17,000. I then bought and sold it a few more times. I still have 250 shares (equal to 125 original) and probably made $25,000 all told on Red Hat stock. So, after all was said and done, I still own more than I would have owned, but also got a nice bonus.
As someone said, this is totally unfair. I agree.
All I did was put up $51,000 in an account - most of which I earned interest on and traded with. But IPOs are highly risky - right now one of the ones I got is worth $1 from an IPO cost of $13 for example. Most of mine have done very well (UPS, Coach, etc), but it's not a good idea to put most of your money in this area. And options are even more insane.
--- Will in Seattle - What are you doing to fight the War?
Just so you know, very RARELY do people go to jail for stock fraud. They usually get slapped on the wrist, they have to start from square 1 (not a problem since the people behind the scam usually have a few million stored away), and they just do it again. Putting them in the red would only slow the crooked screwballs behind E*Trade down.
Moo
Hell yeah it affects the lives of slashdot readers. I was one of the guys fucked by E*Trade on this thing. And I read slashdot a whole lot. I'm a college student who got picked by redhat maybe because I bought a copy of redhat linux 4.1 way back when. Lots of nobodies like me got picked by redhat for this thing. Redhat picked loads of linux developers and random customers. Lots of us ended up setting up etrade accounts and putting down $1200+ on this thing, only to be turned away. Took me a month to get money back from E*Trade. I'm glad this was posted, now to figure out what to do about it...
I should really stop feeding the trolls. Afirmative action is a case of what my 9th grade civics teacher called the marble cake theory of government. The government does not say "You there, private business, I am going to regulate your hiring practices, right down to the percentages". They can and have made antidiscrimination laws, but afirmitive action is not covered by criminal or civil laws, it is economics. The government has lots of money. They often choose to invest some of that money in private enterprize. They also choose to buy things from private enterprize. The basic tenant of afirmative action is: "Follow these rules or we will not give you money. We will not give you grants (Bam! All the universities fall into line.), we will not buy your products (Slam! There goes all the major manufactering companies.), and we not use your services (Wham! there goes everybody else.)". Most businesses, realizing that even if they do not work for the government today they may want to do so in the future, fell into line. Hence the government imposes a "law" that is not really a law. That is also how they get the states to impose laws. Legal drinking age is a state mandanted affair. Here in Louisiana it was 18 until about 4 years ago (long after the rest of the country changed), because the state finally realized that it really needed those federal highway dollars that were being witheld for our lack of compliance with federal standards. Congress never made a law that said "You have to be 21 to drink in this country" they made one that said "States should madate a 21 year old drinking age or forfiet x% of their federal highway funds." My civics book called it the marble cake theory because it basically allows the feds to make rules without making laws (they premete the whole cake, as opposed to the layer cake model which has the feds at the top, and the states (and business) as a lower but distict layer). Hence Constitutional law (which theoretically only governs gov't) seeps into the everyday life of a business through the marvel of economics. Wow, I can't believe i actually remember some of this stuff.
I don't need a million points of light, just two points of multi-mode fiber and a 10 Gig-E router.
Let me clear the slate by saying no... NASD is there to keep the goons like e*trade in line, also to prevent us from busting the bubble like we did during the '29 crash over and over agian. The SEC and NASD were the ones that collared Melliken during his raid on the bond market. I would consider them to be my ally, even if they are a rattlesnake den, but that would keep the dogs away... :)
The guidelines are to keep the playing field level, and how to play the game. They dont tell you what you can bring onto that field to play with tho.. need it be penny stocks, or blue chip monsters.
First rule of holes; When in one, stop digging.
I was one of the etrade screw-ees, but have no idea how this law stuff works =P. Sounds like they're saying the requirement of passing the questionaire was illegal. Would that mean everyone who received the mailing from redhat had the right to invest? Would it make sense to attempt a class action lawsuit?
Since when is a business held to the fifth and sixth amendments of the US Constitution? I don't see ETRADE as signators to the bill of rights. Please leave the constitution out of matters that do not concern it. This is one of those matters. How many times must people here be told, the constitution DOES NOT COVER PRIVATE ENTITIES. It is a documentation/contract between the GOVERNMENT and the PEOPLE. No businesses outside the government are bound to it directly in any way, shape , or form. Indirectly, yes, they are bound to the laws congress passes. Directly, no, businesses are not held to the laws contained in the constitution. Those laws are for government use only. M
I will vouch for mrsam (Sam), one well respected in the net-abuse community. Heck, I'm surprized he applied anti-spam techniques to E*Trade via the legal process. Way to go Sam!
--
WolfSkunks for a better Linux Kernel
$Stalag99{"URL"}="http://stalag99.keenspace.com";
--
# Canmephians for a better Linux Kernel
$Stalag99{"URL"}="http://stalag99.net";
How many times does this have to be repeated? The Bill of Rights only restricts the actions of the Federal government, and to a lesser degree, the actions of State and Local governments. Period. The Bill of Rights does not restrict private or corporate citizens.
What E*Trade did violated NASD guidelines, which they have to agree to abide by or face additional SEC regulations ... so it was right for them to get slapped ... but even so they didn't violate Federal law. It's not against Federal law to be sleazy and slimy...
Are you moderating this down because you disagree with it,
We call it art because we have names for the things we understand.
With any luck, the finding against them will keep them from doing it again. But maybe not.
E*Trade made out very well on this scam.
They lost one arbitration. Maybe, now that this has been published on slashdot, others will step forward and they'll lose more. I certainly hope so.
However, unlike many small investors they likely rolled out of the RHAT stock fairly quickly, locking in some huge profits and eliminating their risk.
At $26k / arbitration they would have to lose a huge number of arbitrations before they would be in the red on the deal, and while that might happen if everyone filed grievances against them, that is unlikely.
It was a good trade. Fuck a few hundred people, make tens of millions, and be forced to pay back a few thousand here and there to the annoying gnats which actually stand up to their chicanery.
Until somebody goes to jail for this, there will not be any true justice, and certainly no incentive whatsoever to prevent E*Trade from doing the same thing all over again to somebody else.
The Future of Human Evolution: Autonomy