Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

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cdog999
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Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by cdog999 » Fri Mar 23, 2018 9:54 am

So, Merrill Edge sold all of my ETFs without my consent. They provided me notice about a month ago they were closing my CMA(Taxable Brokerage) account so I transferred that to another firm, but they never provided any notice about my IRA. I found out this morning that the liquidated all of my positions yesterday. I complained this morning but they basically told me to pound sand.

I've already filed complaints with the SEC, FINRA and CFPB. Any other recommendations on next steps? I've already put in paperwork to transfer to a different firm but I'm still steamed beyond no end on about this.

bgf
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by bgf » Fri Mar 23, 2018 9:56 am

why did they close your accounts?
“TE OCCIDERE POSSUNT SED TE EDERE NON POSSUNT NEFAS EST"

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cdog999
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by cdog999 » Fri Mar 23, 2018 10:24 am

bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by triceratop » Fri Mar 23, 2018 10:29 am

cdog999 wrote:
Fri Mar 23, 2018 10:24 am
bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.
Have you calculated whether you lost any money? Markets might be down from where they sold your positions.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

anonsdca
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by anonsdca » Fri Mar 23, 2018 10:32 am

cdog999 wrote:
Fri Mar 23, 2018 10:24 am
bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.
Are you living outside the US?

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whodidntante
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by whodidntante » Fri Mar 23, 2018 10:33 am

Not attacking you, but what did you do, or what might you have done to provoke this action?

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cdog999
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by cdog999 » Fri Mar 23, 2018 10:51 am

triceratop wrote:
Fri Mar 23, 2018 10:29 am
cdog999 wrote:
Fri Mar 23, 2018 10:24 am
bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.
Have you calculated whether you lost any money? Markets might be down from where they sold your positions.
Right now it is down, but that may change by the time it gets over to TDAM.

Likely was some minor MS on a BOA CC that caused this. Haven't made a single trade in my Merrill accounts in the past 6 months.

But really, isn't it illegal to sell without consent? And not providing notice?

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Pajamas
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Pajamas » Fri Mar 23, 2018 10:57 am

cdog999 wrote:
Fri Mar 23, 2018 10:51 am
But really, isn't it illegal to sell without consent? And not providing notice?
Not if you agreed to that when you opened the account. Go back and read (or re-read) what you agreed to and also re-read the letter they sent you. Also check for any changes to what you agreed to as notices about those are not unusual. You already said that they can close your account without explanation and they may not have to give notice.

Also, you are probably wasting time with all of your complaints. They have standard rules and procedures and algorithms and it is unlikely that some individual there suddenly and illegally liquidated your ETFs on a whim.
Last edited by Pajamas on Fri Mar 23, 2018 11:01 am, edited 2 times in total.

Leesbro63
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Leesbro63 » Fri Mar 23, 2018 10:58 am

It sounds like there’s more to this story. That being said, if the OP can rebuy the assets at the new brokerage at a lower cost, then its a lemons to lemonade thing at worst.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by txranger » Fri Mar 23, 2018 11:07 am

Do you live outside of the US?

That’s most likely reason. It is a real worry of mine — will be seriously considering consolidating to schwab and interactive brokers.

Any expats had similar experience?

My parents recently had a similar horror story w Fidelity — due to some issue w their former employer Fido closed and cashed out my moms ira making them face a huge tax bill. Fortunately after a lot of phone calls they reinstated the account and fixed it. But my dad gonna move it to a diff broker and collect a bonus along the way.

I was recently locked out of chase account and they demanded I show up at the branch even tho I explained I live overseas also. What a pain.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Broken Man 1999 » Fri Mar 23, 2018 11:08 am

cdog999 wrote:
Fri Mar 23, 2018 10:51 am
triceratop wrote:
Fri Mar 23, 2018 10:29 am
cdog999 wrote:
Fri Mar 23, 2018 10:24 am
bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.
Have you calculated whether you lost any money? Markets might be down from where they sold your positions.
Right now it is down, but that may change by the time it gets over to TDAM.

Likely was some minor MS on a BOA CC that caused this(MY BOLD). Haven't made a single trade in my Merrill accounts in the past 6 months.

But really, isn't it illegal to sell without consent? And not providing notice?
What is MS on a BOA CC?

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by whodidntante » Fri Mar 23, 2018 11:13 am

Broken Man 1999 wrote:
Fri Mar 23, 2018 11:08 am
cdog999 wrote:
Fri Mar 23, 2018 10:51 am
triceratop wrote:
Fri Mar 23, 2018 10:29 am
cdog999 wrote:
Fri Mar 23, 2018 10:24 am
bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.
Have you calculated whether you lost any money? Markets might be down from where they sold your positions.
Right now it is down, but that may change by the time it gets over to TDAM.

Likely was some minor MS on a BOA CC that caused this(MY BOLD). Haven't made a single trade in my Merrill accounts in the past 6 months.

But really, isn't it illegal to sell without consent? And not providing notice?
What is MS on a BOA CC?

Broken Man 1999
Manufactured spending on a Bank of America credit card. Manufactured spending refers to techniques to get cash from credit cards, without paying for a cash advance fee and to get the credit card rewards associated with a purchase. The usual reason is to generate credit card rewards that exceed the cost of manufactured spending.
Last edited by whodidntante on Fri Mar 23, 2018 11:14 am, edited 1 time in total.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by deltaneutral83 » Fri Mar 23, 2018 11:13 am

Broken Man 1999 wrote:
Fri Mar 23, 2018 11:08 am

What is MS on a BOA CC?

Broken Man 1999
manufactured spend.

OP- How much did you do and did it involve money orders back into BofA checking account?

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munemaker
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by munemaker » Fri Mar 23, 2018 11:15 am

cdog999 wrote:
Fri Mar 23, 2018 10:24 am
bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.
They can, but did they?

UpperNwGuy
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by UpperNwGuy » Fri Mar 23, 2018 12:41 pm

Did Bank of America shut down your credit card? If so, did they give a reason? How much money was involved in your “minor MS”? Most folk who play the MS game are laundering more than “minor” amounts of money.

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cdog999
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by cdog999 » Fri Mar 23, 2018 4:01 pm

deltaneutral83 wrote:
Fri Mar 23, 2018 11:13 am
Broken Man 1999 wrote:
Fri Mar 23, 2018 11:08 am

What is MS on a BOA CC?

Broken Man 1999
manufactured spend.

OP- How much did you do and did it involve money orders back into BofA checking account?
0 MO deposits to my BOA checking account. I received a letter about them closing my taxable account via UPS. I asked if them for the tracking on the letter for my IRA and of course they couldn't provide which means it was never sent. I'm really surprised that a broker can just sell your assets at any time for any reason without even providing notice. I have a hard time believing their aren't regulations that protect the consumer especially after the financial crises.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Leesbro63 » Fri Mar 23, 2018 4:06 pm

cdog999 wrote:
Fri Mar 23, 2018 4:01 pm
deltaneutral83 wrote:
Fri Mar 23, 2018 11:13 am
Broken Man 1999 wrote:
Fri Mar 23, 2018 11:08 am

What is MS on a BOA CC?

Broken Man 1999
manufactured spend.

OP- How much did you do and did it involve money orders back into BofA checking account?
0 MO deposits to my BOA checking account. I received a letter about them closing my taxable account via UPS. I asked if them for the tracking on the letter for my IRA and of course they couldn't provide which means it was never sent. I'm really surprised that a broker can just sell your assets at any time for any reason without even providing notice. I have a hard time believing their aren't regulations that protect the consumer especially after the financial crises.
I agree. And for the following reason: selling taxable securities can generate a huge tax bill for appreciated assets. If brokerages were allowed to do this willy-nilly, there would be huge tax problems for customers. So for this reason alone I can't imagine that brokerages can just sell a customer's assets without additional reasons. Imagine the huge risk that most taxable investors (who has remained invested since the financial crisis) have if this is true. It just cannot be.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Nate79 » Fri Mar 23, 2018 5:39 pm

Perhaps send them a certified letter that you require in writing an explanation for why they did what they did. I would send copies to the CEO and perhaps find out if they have some type of executive trouble shooting team. I would inform them accurately in the letter who you have informed (SEC, etc) as well.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Northern Flicker » Fri Mar 23, 2018 5:47 pm

I recommend first checking your account agreement to see if the action was consistent with the expectations of the product they offered and you accepted.

If not, I would start with an online complaint with the SEC:

https://www.sec.gov/reportspubs/investo ... shtml.html

This has a reasonable chance of motivating a phone call to you from someone at Merrill who has the ability to explain the action and/or address any wrongdoing.
Index fund investor since 1987.

Chicago60
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Chicago60 » Fri Mar 23, 2018 5:58 pm

Was it a discretionary account, where you gave broker authority to buy/sell?
Was it a margin account, and was the firm entitled to sell?
You already notified the appropriate authorities, and, as noted above, it appears you very likely suffered no losses. Nevertheless, whether you suffered losses or not, from a regulatory point of view at a minimum, unless the answers above are both "no", it seems troubling to me.

123
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by 123 » Fri Mar 23, 2018 6:20 pm

In another thread In a post dated 7/13/2017 cdog999 (the OP) said:

"Yikes, I've been using Ally as my primary "hub" for all my bonuses and MS since Fido shut me down last year. I too use this as my account for everything and keep a hefty balance. But, there is quite a lot moving in and out between different places, recently started using billpay as I'm hoping they don't frown upon that. Seriously there are better ways to ML like real estate. Its a shame that normal people that have a side hobby get caught up in this nonsense."

It sounds like the issues of Manufactured Spending and having a brokerage account shut down (Fido (Fidelity) in the previous year) have caused issues for the OP before. The best suggestion I can make is to carefully follow the terms and conditions of your account agreement. I don't know if brokerages businesses have a central reference for problem accounts/account holders (like banks and credit cards do) but if the OP was shut down by both Fidelity and Merrill Edge he may need more guidance than is reasonably available from Bogleheads.

Edited to add:

You may want to check your credit reports. If you've had credit cards closed by issuers that could create credit issues down the road.

One primary reason a bank or brokerage will close down an account is if there is an indication of abuse of the account or use of the account that is inconsistent with the type of account. For example a brokerage account with a number of transactions moving money in and/or moving money out with that money movement not connected with any investing activity.

Sometimes a business account is more appropriate to certain patterns of transactions than a consumer account. Fees and financial disclosure requirements are different for business accounts than for simple consumer accounts.

Another issue that arises with money transfers that are inconsistent with the normal use of an account and the known financial profile of the account holder is that the financial institution may be obligated to file a Suspicious Activity Report (SAR) with the federal government. The financial institution is not allowed to tell you whether or not they have filed SARs on your account activity. If an account ends up with the financial organization having to file SAR(s) they may decide that it is easier (and cheaper) to end the relationship with the customer instead of bearing the ongoing risk of potentially be an avenue through which their customer participates in transactions they have identified as suspicious according to their standards.
The closest helping hand is at the end of your own arm.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by whodidntante » Fri Mar 23, 2018 7:37 pm

Probably the most significant thing here is to make sure to perform the rollover correctly, so there is no tax/penalty due. Report it to whomever, but I would be very surprised if you recover compensation due to Merrill's actions on this. The type of person to take an action like "end the relationship with this former customer" isn't a first line phone rep. While not infallible, they are probably knowledgeable.

123
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by 123 » Fri Mar 23, 2018 7:54 pm

whodidntante wrote:
Fri Mar 23, 2018 7:37 pm
...The type of person to take an action like "end the relationship with this former customer" isn't a first line phone rep. While not infallible, they are probably knowledgeable.
+1 The decision to liquidate a customer's brokerage account assets and/or close their account is undoubtedly made by the organization's compliance department with an additional review by the organization's legal department likely. The job of the compliance department is to ensure that the organization complies with all laws and regulations. In most financial organizations the authority of the compliance department is final and absolute. Compliance Departments are generally led by the most knowledgeable and astute people in the organization, it is their job to protect the organization from being fined and/or shutdown due to regulatory violations.
The closest helping hand is at the end of your own arm.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Olemiss540 » Sat Mar 24, 2018 9:45 am

123 wrote:
Fri Mar 23, 2018 6:20 pm
In another thread In a post dated 7/13/2017 cdog999 (the OP) said:

"Yikes, I've been using Ally as my primary "hub" for all my bonuses and MS since Fido shut me down last year. I too use this as my account for everything and keep a hefty balance. But, there is quite a lot moving in and out between different places, recently started using billpay as I'm hoping they don't frown upon that. Seriously there are better ways to ML like real estate. Its a shame that normal people that have a side hobby get caught up in this nonsense."

It sounds like the issues of Manufactured Spending and having a brokerage account shut down (Fido (Fidelity) in the previous year) have caused issues for the OP before. The best suggestion I can make is to carefully follow the terms and conditions of your account agreement. I don't know if brokerages businesses have a central reference for problem accounts/account holders (like banks and credit cards do) but if the OP was shut down by both Fidelity and Merrill Edge he may need more guidance than is reasonably available from Bogleheads.

Edited to add:

You may want to check your credit reports. If you've had credit cards closed by issuers that could create credit issues down the road.

One primary reason a bank or brokerage will close down an account is if there is an indication of abuse of the account or use of the account that is inconsistent with the type of account. For example a brokerage account with a number of transactions moving money in and/or moving money out with that money movement not connected with any investing activity.

Sometimes a business account is more appropriate to certain patterns of transactions than a consumer account. Fees and financial disclosure requirements are different for business accounts than for simple consumer accounts.

Another issue that arises with money transfers that are inconsistent with the normal use of an account and the known financial profile of the account holder is that the financial institution may be obligated to file a Suspicious Activity Report (SAR) with the federal government. The financial institution is not allowed to tell you whether or not they have filed SARs on your account activity. If an account ends up with the financial organization having to file SAR(s) they may decide that it is easier (and cheaper) to end the relationship with the customer instead of bearing the ongoing risk of potentially be an avenue through which their customer participates in transactions they have identified as suspicious according to their standards.
OP has been notified of grossly violating terms and conditions of multiple banks to an extent they are moving brokerage house to brokerage house and the OP is posting on a public forum that they are reaching out to all public/federal authorities that they have been "harmed" by the banks (while the banks are following the terms and conditions of their agreement with the OP).

Classic.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

ny_knicks
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by ny_knicks » Sat Mar 24, 2018 10:08 am

Manufactured spending certainly falls in a grey area and while you may consider it a hobby the financial institutions you are "doing business" with likely do not.

You should have read the T&C fully and accepted the risk/rewards of engaging in MS.

This wasn't something the bank likely did without a significant amount of investigation into the account and you were likely notified multiple times to stop before they took this action.

Not sure SEC, FINRA or CFRB is going to bail you out on this one.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by ncbill » Sat Mar 24, 2018 11:50 am

ny_knicks wrote:
Sat Mar 24, 2018 10:08 am
Manufactured spending certainly falls in a grey area and while you may consider it a hobby the financial institutions you are "doing business" with likely do not.
Manufactured spending can get you fired.

Not sure if it was on this forum, but one poster who worked for a government contractor requiring a clearance was doing a lot of MS & found themselves the subject of a federal investigation, so their employer decided they were too much trouble to keep.

EDIT: might have been on fatwallet's finance forum, if anyone wants to the download the 4GB+ archive & search.
Last edited by ncbill on Sat Mar 24, 2018 12:27 pm, edited 2 times in total.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by triceratop » Sat Mar 24, 2018 11:57 am

ncbill wrote:
Sat Mar 24, 2018 11:50 am
ny_knicks wrote:
Sat Mar 24, 2018 10:08 am
Manufactured spending certainly falls in a grey area and while you may consider it a hobby the financial institutions you are "doing business" with likely do not.
Manufactured spending can get you fired.

Not sure if it was on this forum, but one poster who worked for a government contractor requiring a clearance was doing a lot of MS & found themselves the subject of a federal investigation, so their employer decided they were too much trouble to keep.
Without getting into the politics of labor law in this country or the fact anyone can be “investigated” for anything, I’m not sure I would call MS the proximal cause for this one. An unfortunate situation indeed.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by whodidntante » Sat Mar 24, 2018 12:45 pm

This story of the person with security clearance getting investigated sounds plausible. There is nothing illegal about MS, but it certainly looks like there might be something off about it to the uninitiated.

I've seen reports on forums of individuals doing 100k or more every month. It is hard to imagine being able to earn more than 1.5% at scale due to the costs involved. You can do much better if you opportunistically MS. But I really wouldn't mess with BoA or any other issuer where I wanted to maintain a relationship. They aren't stupid and all it takes is human eyes to cook your goose. I have a heavy relationship with BoA. I run a lot of money through credit cards. I sometimes worry that my legitimate spend would look off to them, LOL.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Olemiss540 » Sat Mar 24, 2018 1:39 pm

whodidntante wrote:
Sat Mar 24, 2018 12:45 pm
This story of the person with security clearance getting investigated sounds plausible. There is nothing illegal about MS, but it certainly looks like there might be something off about it to the uninitiated.

I've seen reports on forums of individuals doing 100k or more every month. It is hard to imagine being able to earn more than 1.5% at scale due to the costs involved. You can do much better if you opportunistically MS. But I really wouldn't mess with BoA or any other issuer where I wanted to maintain a relationship. They aren't stupid and all it takes is human eyes to cook your goose. I have a heavy relationship with BoA. I run a lot of money through credit cards. I sometimes worry that my legitimate spend would look off to them, LOL.
Don't think anyone was saying it is illegal. Is MS against ALL point credit cards' T&C? Are you willfully violating the agreement T&C when you churn points through MS?
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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cdog999
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by cdog999 » Sun Mar 25, 2018 8:02 am

Olemiss540 wrote:
Sat Mar 24, 2018 9:45 am
123 wrote:
Fri Mar 23, 2018 6:20 pm
In another thread In a post dated 7/13/2017 cdog999 (the OP) said:

"Yikes, I've been using Ally as my primary "hub" for all my bonuses and MS since Fido shut me down last year. I too use this as my account for everything and keep a hefty balance. But, there is quite a lot moving in and out between different places, recently started using billpay as I'm hoping they don't frown upon that. Seriously there are better ways to ML like real estate. Its a shame that normal people that have a side hobby get caught up in this nonsense."

It sounds like the issues of Manufactured Spending and having a brokerage account shut down (Fido (Fidelity) in the previous year) have caused issues for the OP before. The best suggestion I can make is to carefully follow the terms and conditions of your account agreement. I don't know if brokerages businesses have a central reference for problem accounts/account holders (like banks and credit cards do) but if the OP was shut down by both Fidelity and Merrill Edge he may need more guidance than is reasonably available from Bogleheads.

Edited to add:

You may want to check your credit reports. If you've had credit cards closed by issuers that could create credit issues down the road.

One primary reason a bank or brokerage will close down an account is if there is an indication of abuse of the account or use of the account that is inconsistent with the type of account. For example a brokerage account with a number of transactions moving money in and/or moving money out with that money movement not connected with any investing activity.

Sometimes a business account is more appropriate to certain patterns of transactions than a consumer account. Fees and financial disclosure requirements are different for business accounts than for simple consumer accounts.

Another issue that arises with money transfers that are inconsistent with the normal use of an account and the known financial profile of the account holder is that the financial institution may be obligated to file a Suspicious Activity Report (SAR) with the federal government. The financial institution is not allowed to tell you whether or not they have filed SARs on your account activity. If an account ends up with the financial organization having to file SAR(s) they may decide that it is easier (and cheaper) to end the relationship with the customer instead of bearing the ongoing risk of potentially be an avenue through which their customer participates in transactions they have identified as suspicious according to their standards.
OP has been notified of grossly violating terms and conditions of multiple banks to an extent they are moving brokerage house to brokerage house and the OP is posting on a public forum that they are reaching out to all public/federal authorities that they have been "harmed" by the banks (while the banks are following the terms and conditions of their agreement with the OP).

Classic.
I've never said I've violated any T&Cs, this is you just jumping to your own conclusions. There was never a single time were anyone ever said I have violated any T&Cs. And, I was asking for some advice so its time to get off your high horse. I've seen multiple posts on here about "jumping" to different brokerages to get bonuses. Heck, on of the more prominent posters (starts with an L and ends with a T) does it.

My point here is that a brokerage can sell your assets for whatever reason they deem without even giving any notice whatsoever. That has to be illegal.
Last edited by cdog999 on Sun Mar 25, 2018 8:21 am, edited 1 time in total.

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SlowMovingInvestor
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by SlowMovingInvestor » Sun Mar 25, 2018 8:10 am

Olemiss540 wrote:
Sat Mar 24, 2018 1:39 pm
whodidntante wrote:
Sat Mar 24, 2018 12:45 pm
This story of the person with security clearance getting investigated sounds plausible. There is nothing illegal about MS, but it certainly looks like there might be something off about it to the uninitiated.

I've seen reports on forums of individuals doing 100k or more every month. It is hard to imagine being able to earn more than 1.5% at scale due to the costs involved. You can do much better if you opportunistically MS. But I really wouldn't mess with BoA or any other issuer where I wanted to maintain a relationship. They aren't stupid and all it takes is human eyes to cook your goose. I have a heavy relationship with BoA. I run a lot of money through credit cards. I sometimes worry that my legitimate spend would look off to them, LOL.
Don't think anyone was saying it is illegal. Is MS against ALL point credit cards' T&C? Are you willfully violating the agreement T&C when you churn points through MS?
Even if one were to violate a BoA card's T&C, that doesn't give ME authority to not just close the CC account, not just close bank accounts, but to close and sell all assets in an ME account without notice. My recollection is that linking your BoA account to your ME account is optional -- most people do it for award eligibility, but it's not required.

I think it's totally unacceptable for a firm to take such action barring really extreme circumstances (court orders, ongoing criminal investigations etc). And even then, the firm should freeze the account, not liquidate holdings.

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cdog999
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by cdog999 » Sun Mar 25, 2018 8:15 am

ny_knicks wrote:
Sat Mar 24, 2018 10:08 am
you were likely notified multiple times to stop before they took this action.
0 notifications on the IRA. They can't provide tracking on notification because none exist.

cherijoh
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by cherijoh » Sun Mar 25, 2018 8:23 am

ny_knicks wrote:
Sat Mar 24, 2018 10:08 am
Manufactured spending certainly falls in a grey area and while you may consider it a hobby the financial institutions you are "doing business" with likely do not.

You should have read the T&C fully and accepted the risk/rewards of engaging in MS.

This wasn't something the bank likely did without a significant amount of investigation into the account and you were likely notified multiple times to stop before they took this action.

Not sure SEC, FINRA or CFRB is going to bail you out on this one.
If the financial institution detected a pattern of suspicious activity (for whatever reason), they cannot let you know that you are under investigation. But I think account closure in most of those instances refer to checking accounts or credit cards - so there is no potential loss due to being out of the market.

But if the OP has been kicked off more than one brokerage platform, I suspect that we haven't heard the entire story and that his activity was more than "some minor manufactured spending"

Olemiss540
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Olemiss540 » Sun Mar 25, 2018 8:25 am

cdog999 wrote:
Sun Mar 25, 2018 8:02 am
Olemiss540 wrote:
Sat Mar 24, 2018 9:45 am
123 wrote:
Fri Mar 23, 2018 6:20 pm
In another thread In a post dated 7/13/2017 cdog999 (the OP) said:

"Yikes, I've been using Ally as my primary "hub" for all my bonuses and MS since Fido shut me down last year. I too use this as my account for everything and keep a hefty balance. But, there is quite a lot moving in and out between different places, recently started using billpay as I'm hoping they don't frown upon that. Seriously there are better ways to ML like real estate. Its a shame that normal people that have a side hobby get caught up in this nonsense."

It sounds like the issues of Manufactured Spending and having a brokerage account shut down (Fido (Fidelity) in the previous year) have caused issues for the OP before. The best suggestion I can make is to carefully follow the terms and conditions of your account agreement. I don't know if brokerages businesses have a central reference for problem accounts/account holders (like banks and credit cards do) but if the OP was shut down by both Fidelity and Merrill Edge he may need more guidance than is reasonably available from Bogleheads.

Edited to add:

You may want to check your credit reports. If you've had credit cards closed by issuers that could create credit issues down the road.

One primary reason a bank or brokerage will close down an account is if there is an indication of abuse of the account or use of the account that is inconsistent with the type of account. For example a brokerage account with a number of transactions moving money in and/or moving money out with that money movement not connected with any investing activity.

Sometimes a business account is more appropriate to certain patterns of transactions than a consumer account. Fees and financial disclosure requirements are different for business accounts than for simple consumer accounts.

Another issue that arises with money transfers that are inconsistent with the normal use of an account and the known financial profile of the account holder is that the financial institution may be obligated to file a Suspicious Activity Report (SAR) with the federal government. The financial institution is not allowed to tell you whether or not they have filed SARs on your account activity. If an account ends up with the financial organization having to file SAR(s) they may decide that it is easier (and cheaper) to end the relationship with the customer instead of bearing the ongoing risk of potentially be an avenue through which their customer participates in transactions they have identified as suspicious according to their standards.
OP has been notified of grossly violating terms and conditions of multiple banks to an extent they are moving brokerage house to brokerage house and the OP is posting on a public forum that they are reaching out to all public/federal authorities that they have been "harmed" by the banks (while the banks are following the terms and conditions of their agreement with the OP).

Classic.
I've never said I've violated any T&Cs, this is you just jumping to your own conclusions. There was never a single time were anyone ever said I have violated any T&Cs.

My point here is that a brokerage can sell your assets for whatever reason they deem without even giving any notice whatsoever. That has to be illegal.
"Likely was some minor MS on a BOA CC that caused this", so you lied when you stated this, or this isn't against the T&Cs of your credit agreement? Which is it?
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

mjb
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by mjb » Sun Mar 25, 2018 8:29 am

I think we are missing a lot of the story. I know people who are involved in these processes and they only do it if there is a serious reason. It most likely was activity that looked like or was money laundering.

danaht
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by danaht » Sun Mar 25, 2018 8:50 am

Sorry about Merrill Edge/Bank Of America closing your accounts. If I ever get a letter that one of my accounts is being closed - I would probably transfer all my accounts with that provider (not just one). So next time - close (or transfer) all your accounts before they do! Also you might consider cutting back on the MS - too much of anything is usually a bad thing.

TravelGeek
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by TravelGeek » Sun Mar 25, 2018 9:13 am

mjb wrote:
Sun Mar 25, 2018 8:29 am
I think we are missing a lot of the story. I know people who are involved in these processes and they only do it if there is a serious reason. It most likely was activity that looked like or was money laundering.
I, too, think there are missing bits of the story.

That said, I would be interested to know under what circumstances my financial institutions have the right to sell assets (I only have mutual funds and CDs) considering the potential of significant economic harm from taxation. I guess I should try to find the T&C I agreed to some 25 years ago when I opened my Vanguard and Fidelity accounts. Or simply read the most recent version since I assume I implicitly agreed to any changes by virtue of not closing my account when I was sent new fine print over the years.

Some people mentioned foreign residency as a potential cause for the OPs scenario. Would the likes of Vanguard or Fidelity really sell funds if they suspected foreign residency? I thought, from previous threads, that it usually leads to a freezing of the account, at least initially, to give the customer the opportunity to deal with the situation. I would be plenty of expats don’t think about this when agreeing to move overseas.

UpperNwGuy
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by UpperNwGuy » Sun Mar 25, 2018 9:31 am

From Bank of America's Reward Program Rules:

"Transactions not eligible for Points
You won’t earn Points for:
• Balance Transfers and Cash Advances, including travelers checks, money orders and other cash equivalents"

Manufactured spending, by its very nature, involves using a credit card to purchase cash equivalents in order to earn points, miles, or cash back.

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SlowMovingInvestor
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by SlowMovingInvestor » Sun Mar 25, 2018 9:43 am

mjb wrote:
Sun Mar 25, 2018 8:29 am
I think we are missing a lot of the story. I know people who are involved in these processes and they only do it if there is a serious reason. It most likely was activity that looked like or was money laundering.
I don't know the full story in this case either, but I can give a very recent experience I had. I have a plain vanilla account with a megabank, have had it for 20+ years, also have lots of CCs with them in good standing. Recently, I did an ACH of 10K from another large bank to the megabank.This was a newly linked account, but I do ACHes all the time back and forth from other accounts to megabank account. I found I couldn't login, and was told to visit a bank branch without any explanation.

I visited a branch and talked to the manager (who knows me well). The manager called up a megabank unit (not sure which one), and then told me it was because of the ACH. Then he asked me about the other account, whether I had the account number, whether I could login to it right now. I explained that I hadn't been told why I had to visit the branch, and I had none of the information with me right now and didn't want to go back home to fetch it. After some back and forth, the person on the phone cancelled the ACH transaction and unfroze my account. If I hadn't known the manager well, I suppose I might have had more problems. And to add to my annoyance, the manager tried to upsell me into premium offerings while we were on hold !

My point is that while I appreciate the efforts of financial institutions to prevent fraud, they can overreact to innocuous transactions.

afan
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by afan » Sun Mar 25, 2018 9:54 am

Let's back off the accusations and try to help.
If I were the OP I would be most alarmed at having been kicked out by, at least, two large brokers. What is going on?

Having happened at least twice, it seems highly unlikely that two big companies made the same simple mistake.
Likely there is more to it than a totally random screw up on the part of the brokers.

If the OP is simply doing normal brokerage things, then I would be concerned about OP having been confused with someone else. Has there been identity theft and brokers are attributing to OP actions taken by someone else?

If the OP is doing something unusual, then it is time to look at those activities and see whether they really do violate terms of service, or look suspicious to the brokers. The OP mentioned manufactured spending, but we don't know whether that was what has tripped the brokers. Was the OP doing the same thing at Fidelity as at Merrill? Did either company give an explanation for closing the accounts?

Has this happened more than twice? If so, were the activities the same at all the brokers?

Were these personal accounts that looked like business?
Were there large cash transactions that made the banks nervous about money laundering?

If the OP really cannot think of any activity that would trigger these reactions and the brokers will not explain, then I would get worried again about having been, erroneously, marked as doing something dishonest, perhaps illegal. With no explanations forthcoming, I would go to a lawyer for help sorting it out.

I suppose one could try going through the regulators, but I don't know how helpful they will be in the detective work to figure out what is going on.

Of course, if the OP knows why the brokers reacted the way they did and is just complaining that they get to unilaterally sell the investments and close the accounts, then I agree with the answers to read the account agreements and search the law to see whether this is permitted. Given the level of oversight and compliance in these broker firms, if they did it I would be astonished if they were not permitted to do so.

If the OP has been doing something that has resulted in the abrupt closure of at least 2 accounts, I would stop whatever it is. I would be worried about getting the attention of the feds, major legal hassles, and perhaps not finding a broker who would take my business....
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Watty
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Watty » Sun Mar 25, 2018 9:58 am

Just FYI, if there was something going on like the OP had a balance on a credit card that was overdue then the lender has the "Right of Offset" to take money from one account to pay off the debt.

https://www.bankrate.com/personal-finan ... d-to-know/

This is one reason that I do not have any credit cards at financial institutions where I have my money at.

One concern that I have is that there could be a fraudulent credit card charge that is disputed that the bank decides to not cover so they can take the money out of your other accounts to pay it off.

Katietsu
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Katietsu » Sun Mar 25, 2018 10:15 am

It is possible that ME's practice is to send notice and it was a mistake that no notice was sent concerning the IRA. But...

If the OP has been doing something that has resulted in the abrupt closure of at least 2 accounts, I would stop whatever it is. I would be worried about getting the attention of the feds, major legal hassles, and perhaps not finding a broker who would take my business....
This would worry me.

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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Doom&Gloom » Sun Mar 25, 2018 11:52 am

More than one bank does not wish to conduct business with OP for some reason. OP does not seem concerned about that (or wish to disclose details, which is certainly his right), but he wants to blame the manner in which one bank severed its relationship with him.

There seems to be a lesson there, but this does not seem to be a case for the Bogleheads to me.

tmcc
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by tmcc » Sun Mar 25, 2018 12:29 pm

MS sounds like a lot of work only to pick up nickels

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Pajamas
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Pajamas » Sun Mar 25, 2018 12:52 pm

Just restating what has already been said by me and others, but quoting directly from a very appropriate and reliable source, the SEC:
Brokerage Account – Closing Your Brokerage Account

Generally, either you or your brokerage firm may close your brokerage account at any time. The specific steps you will need to follow to close your account are usually found in the terms and conditions of your brokerage account agreement. In addition, these terms and conditions generally specify when and how your brokerage firm may close your brokerage account at its own discretion.
https://www.sec.gov/answers/closingbrok ... count.html

afan
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by afan » Sun Mar 25, 2018 1:39 pm

Yep. My brokerage account agreement says the same thing.
Sounds like this is the brokerage business's way of telling the OP to knock it off. Take my advice and take the hint.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

CedarWaxWing
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by CedarWaxWing » Sun Mar 25, 2018 1:46 pm

tmcc wrote:
Sun Mar 25, 2018 12:29 pm
MS sounds like a lot of work only to pick up nickels
1+

Tallis
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by Tallis » Sun Mar 25, 2018 8:23 pm

CedarWaxWing wrote:
Sun Mar 25, 2018 1:46 pm
tmcc wrote:
Sun Mar 25, 2018 12:29 pm
MS sounds like a lot of work only to pick up nickels
1+
I love manufactured spending. I don't do it, but when Mrs. Tallis and I discuss my latest hare-brained scheme involving credit card bonuses, I can always point to manufactured spending and say, "Well, dear, at least I don't do that."

UpperNwGuy
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by UpperNwGuy » Sun Mar 25, 2018 9:12 pm

tmcc wrote:
Sun Mar 25, 2018 12:29 pm
MS sounds like a lot of work only to pick up nickels
Ahhh.... but it usually isn't just nickels. People pick up LOTS of money doing MS. I refuse to do it, because I think it is dishonest, but many credit card hobbyists don't share my puritanical standards.

bikechuck
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Re: Merrill Edge sold my ETFs without my consent, SEC, FINRA, CFPB?

Post by bikechuck » Sun Mar 25, 2018 9:22 pm

cdog999 wrote:
Fri Mar 23, 2018 10:51 am
triceratop wrote:
Fri Mar 23, 2018 10:29 am
cdog999 wrote:
Fri Mar 23, 2018 10:24 am
bgf wrote:
Fri Mar 23, 2018 9:56 am
why did they close your accounts?
Per their T&C they can close without explaining why.
Have you calculated whether you lost any money? Markets might be down from where they sold your positions.
Right now it is down, but that may change by the time it gets over to TDAM.

Likely was some minor MS on a BOA CC that caused this. Haven't made a single trade in my Merrill accounts in the past 6 months.

But really, isn't it illegal to sell without consent? And not providing notice?
Geez I hate acronyms. What in heavens name is a MS on a BOA CC?

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