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April Fools Sees Fake Extra Millions For Users of Brokerage Site
Upstart online brokerage site Zecco had an unfortunate April Fool's day snafu that they are claiming was an honest mistake. Users logged on to find larger balances than they should have, sometimes millions of dollars extra, and many of those users started trading with the nonexistent money. Happy April Fool's Day. "... when Zecco realized it, the company apparently started to force sell, even at a loss, charging the losses to the customers along with a '$19.99 broker-assisted trading fee.' Oops."
First of all, it obviously WAS an honest mistake. Even if they millions showing up as "buying power" were intended as a joke, the fact that the system allowed them to be used for actual purchases, most certainly was a mistake.
Now, when you have a brokerage account and are trading stocks, you should know what you are doing and be responsible for your actions. So, when you see several million in you account, you should know as much to not start investing them. If it is not your money, at best it will be considered a margin trade which has to abide to SEC mandated rules. IIRC on a margin trade you have to have equity worth 25% (or whatever the figure is) of the security that you acquired on margin. Otherwise the broker has to automatically sell to cover. If you don't know things like that, you should not be trading at the stock market.
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It's from the Roman numeral for thousand: M. MM is a thousand thousand, or a million.
... and that's when the C.H.U.D.'s came at me.
Are you illiterate? From the summary: Upstart online brokerage site Zecco had an unfortunate April Fool's day snafu that they are claiming was an honest mistake (emphasis mine).
From the linked "article": Consumerist has updated their post with a message from Zecco claiming that it was not an April Fool's joke,...
And from the "real" article that is linked from there: Online brokerage site Zecco accidentally increased 1% of their customers' Buying Power balances by millions on April 1st, leading some customers to wonder whether it was a system glitch or some horrible April Fool's joke. It turned out to be the former.
And from Zecco itself: "Additionally, we want to make it clear that contrary to some reports, this was not in any way intentional and was not an April Fool's joke. We take the integrity of our customers' accounts very seriously and we have taken measures to ensure this does not happen again."
Whether or not you believe Zecco is a different matter, but the only thing pointing towards it being an April Fool's joke is speculation, and this is flatly contradicted by the claims of Zecco, and the summary somewhat accurately conveys this.
Except in a very small number of egregious and fraudulent cases, customers will not be responsible for losses (or gains) incurred for trades in excess of their buying power.
A million in Roman Numerals would be an M with a horizontal bar over it (the horizontal bar means the numeral should be multiplied by a thousand).
However, this character (M-bar) did not exist in most typefaces when finance was being written about & published extensively for the first time (eighteenth century) so manuscripts we printed using a second 'M' instead.
Since people learned notations from the books they read, the 'MM' abbreviation for millions stuck around, being passed into each new generation of printed books & pamphlets... it's still in heavy use in finance and accounting to this day.
Yes, it's a legacy artifact, but I like it because it disambiguates 'M' from meaning million (as an abbreviation for million) or thousand (from Roman numerals).
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for those keeping track, its:
- slashdot links to
- techdirt links to
- consumerist links to
- mymoneyblog links to
- zecco forums
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People have no obvious way of knowing they're fake. People do what people do - use the money.
And people who have done the same type thing with ATMs find they are fully responsible for their spending habits. If today you have $1,000 in the bank and tomorrow you find $1,000,000 in your account, it is rather obvious you didn't just make $999,000 dollars over night. If you spend it, you just spend dollars out of your original $1,000 and not out of your desired $999,000. If you go in the negative, you're still responsible for the negative balance. At least that's how the courts have treated these cases in regards to ATMs. And guess what, they even had to pay their applicable ATM fees.