Run-in with the SEC

Run-in with the SEC

On the 3rd of December 2021, TD Ameritrade (Toronto-Dominion Bank), a partner of Schwab (Charles Schwab Corporation) made the unjustified decision (unceremoniously, I might add) to "illegally" seize my account, this was premised on the reason that it was done to protect the client's interest, for the purposes of fraud and money-laundering investigations. This happening to me was rather strange, as I was absolutely positive that I had indeed submitted all the necessary required documents, and all the information was reported correctly. Further, I had used TD Ameritrade before back in 2019, and I've had a pretty good experience with the ThinkOrSwim platform, so such a drastic action with no forenotice nor follow up semmed — out of place. 

I should note this was done unceremoniously aswell, as the S&P 500 had falled by 4% since peak, prior to this occuring, thus, I wanted to take advantage of the (hopefully) temporary drawback. 

The service represenatives informed me that they will have to contact the fraud represenative departments to verify my (the client's) identitfy, before they can properly give an answer as to why my account was closed. To say I was shocked, would be understating it. I'd thought given my past experiences with TD Ameritrade, that, as a broker they would be atleast responsible to send me an notification, or give me a call to inform me that something was awry with my account and further communication was needed before I can trade. None these things happened. Thus, I thought, this must have been a unique occurance to me. 

So, in the meanwhile, I'd thought to take a look in community chat forums to hoping find some advice or solance in other users that had previously experienced such a frustrating issue. I didn't have to look far. Wikipedia, Quora, Reddit, the more places I look, the more shitty news I hear about TD Ameritrade, the more acqusitions I heard of TD's utter negligence and malpratice them demonstrate in handling client accounts and how lack-luster their communication skills are with their clients, and the more distrust grew inside me. Here are a few examples:

In a post made by u/CasualCorona titled "Locked out of my $54,000 account for over 3 weeks, TD Ameritrade has been radio silent. ", a fellow commenter stated

"I kept calling and badgering customer service / the fraud department until they finally looked into it and re-opened the account. Unfortunately, unless you're in direct contact with them I doubt you'll hear anything / have any sort of status change"

   riticalcreader - Reddit, 8 months ago

Here's more disgusting evidence... Another commented on TD's actions to restrict and shut-off a client's ability to buy and sell their holdings.

"Then, ... I have tried to start buying all the sudden to being restricted. I freaked out and started reading comments how bad is that scam from TD Ameritrade."

Finally, one hits it right on-the-money.

"They love to use the method of falsely claiming there's fraudulent activity on accounts that are net positive and in good standing so they can freeze and or close them."

    thelsuera - Reddit, 8 months ago

So ... what... Am I fucked? Can I really trust no one going forward? Even one's that are meant to "keep it professional" and one's that you will last expect to resort to shady tactics to support the profitability of hedge funds and big banks? Can I (as a consumer ) still reasonably expect a level of respect and regard to be kept for client privlleges? Unforunately, I can't come to this conclusion in this blog post, but it did reinforce this notion: Brokers aren't your friends.

Why is this important? Why should you care? If you're like me, a consumer stock investor, you should have very right to buy and sell the assets your assets. Stocks, derivatives, they are your property — yours to buy, to sell, and to do with as you please. The very fact that TD restrictions your right to do this, and tries to justifies this with the bogus claim on pre-emptive consumer protection is just absolutely unresonnable and quite scary to think about in the implications of Who can you trust? I knew brokers aren't your friends, but fuck me, this is wild.  

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