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.
The surge in “Buying Power” was an accidental extension of credit to the customers’ accounts. Actual funds were not deposited therein. After the error was discovered, the mistaken credit was withdrawn. However, not before some executed trades on the lines of credit, including including one guy who bought over $1 million in shares. The company then acted to reverse the errors, saying on their blog, “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.”
The system glitch was due to one of their vendors giving them an incorrect data feed, said the company. “In no way Zecco Trading was trying to be funny regarding such a sensitive matter as your buying power or account balance, nor would it even consider doing this,” said Zecco. By early Monday, the notoriously humor-deprived SEC gave the company a ring.
The affected members weren’t laughing either, as evidenced by their posts in the Zecco forums…
- md_abbas007: My Order got executed!!!! whats going to happen now? Will they come after me to collect the money?
- slkrol: DITTO HERE. As an April Fools joke, I placed several ridiculous orders and they were ACCEPTED!!!! Let’s see what happens.
- ballen06: Unfortunately, zecco actually executed an order that was for 3200.00 when i only have 2k in the account, all of which was in settlement so I should not have been able to buy anything. I called and e-mailed Zecco immediately and sold the stock within seconds since I was scared to hold something that wasn’t mine. Zecco initially assured me it would be takeN care of but is now telling me I have to eat the $800.00 loss. Essentially they executed a trade that should have never been executed.
- west: ummmm, this is ridiculous. so i thought it was an april fools joke, put in an order for SKF, and it went through then Zecco just sold it —– more than likely making me take the loss please let me know if any of you experienced this! lol….and they charged me $19.99 for commission
- ctb242: I am new to Zecco, and equally new to stock trading. As you all noticed yesterday, we woke up with an exorbitant number in our accounts. I waited a few hours thinking that this was surely an error, but when it didn’t change, I thought let me test this and buy some stocks and immediately sell. Which I did – I bought approximately $14,000 worth of stocks, sold when it was up $70. The money was immediately replenished after that sell, and I didn’t touch my account again. By the end of the day, it seemed the issue had resolved itself. However, today, my buying power is -$14,000, approximately the amount of the transaction. Did this happen to any of you that did the same thing? It doesn’t seem that this is right since the money was immediately repaid, and if anything, I might just owe zecco that $70 profit. I would appreciate thoughts on this.
Certainly a foul-up on Zecco’s part, but c’mon people, only in Monopoly does a “Bank Error In Your Favor” mean you get to keep the cash.
Zecco April Fools’ Day: Million Dollar Account Balances [My Money Blog]
Woohoo! I’m a millionaire! Sorta. Maybe not [Zecco Forums]
Note: an earlier version of this post was posted on Sunday afternoon. It was revised Monday morning to reflect new information released by Zecco.