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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."
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.
Unless of course you see the date, think that it is a joke and start bidding with it to go along with the prank. If you go with the company "it was a mistake, sorry.", you can't blame the costumers for going along and pretend they had that money.
--- "When you gotta do something wrong. You gotta do it right. (Fighter)"
Screw ups like this is why I insist that all financial institutions that I have business with send me paper statements.
...people aren't that stupid.
More likely many of them realized "Hey, this could be an aprils fool or then not. I don't know. I could check it and get confirmation oooor.... I could act as if it wasn't and sue the hell out of them if this is!"
While nobody should be stupid enough to fall into that joke for too long, no organization should be stupid enough to make jokes with large sums of money.
I dunno. My problem here is that I highly doubt anyone cared to double check their investment first. This is the classic "oh shit, the bank machine says I have 100k instead of 10, quick, withdraw". In no way am I suggesting this isn't a mistake on Zecco's part. But people have a responsibility with their monies, and if you log into your online investment management system and see a number that clearly isn't right, you have a responsibility to take appropriate action. That action is not: WOO HOO LETS TRADE BEFORE WE'RE CAUGHT. This is likely a loss for everyone. Zecco may have pushed some monetary loss onto the clients, but this media is a blow to their PR and I'm sure they sucked up some losses too.
You log in your account and find a huge sum of money in their. Or, I hit the jackpot you think. Now you go and start using it for trade. TFA is a bit lightly on the details, but looks like this trades were go, meaning basically, market fraud.
I think filing a lawsuit would be overwhelmingly stupid, because anyone who opens their account and sees the balance off by a million dollars should reasonably know that there's been a mistake. If a jury agrees, then you've got a case of fraud. File the lawsuit and the SEC will come down on you hard for 10b violations.
Unless you thought that ridiculously large amount of money was a prank and you didn't think you could actually spend it.
Poorly done April Fools joke.
Come on. Anyone with half a brain could figure out that no financial company would do something like that just for a "joke". Their liability for lawsuits and shit would be so obvious that they wouldn't even dream of doing that.
However, it would be more likely that it could have been an April Fools' joke of some idiot employee thinking it was funny to do such a thing without company approval. And according to their press release, likely was thrown out the door.
From their press release...
On April 1, 2009, one of our vendors provided Zecco Trading with an incorrect data feed which caused some customers to see erroneously high buying power.
[...]
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.
I think a car analogy is due.
Zecco made the error. Zecco eats the consequences. Period. Why should people be held liable for someone else's mistakes?
So you drive into work, and manage somehow to park your car in the wrong spont, belonging to and reserved for a neighboring business. Upon leaving the office to head home, you discover the mistake, and find the parking spots owner has stripped it down to the frame and sold all the parts on craigslist.
Explain why you should eat these consequences.
If maybe your neighbor had called a tow truck and had the vehicle impounded, sure I could see you having to eat that.
But I'm not following why you should have to eat your neighbors blatant theft of something he knew wasn't his. Just because you put the car in his spot is not a valid reason for him to think its now his car. Similarly, if the bank makes a mistake in your favor with your account, its not valid to assume the money is yours. The bank should eat all the costs of fixing their mistake, but if you attempt to try and keep or use the money that isn't yours, you become liable for that. Their is lots of supporting precedence for this too.
Try this:
* You are a Zecco customer with $20,000 in your account
* On APRIL FOOLS day you log in and see that you now have $1,020,000 in your account
* Your heart is filled with humor. "I get the joke!" you say.
* You start making joke trades with your joke fortune
* Zecco executes the trades, then reverts the trades at your expense
* You are angry and feel cheated