Unauthorized trading fidelity

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Dottie57
Posts: 10922
Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: Unauthorized trading fidelity

Post by Dottie57 »

File the police report as specified by Fidelity. If you are not willing to do so, why do you think Fidelity would believe that this isn’t a case of regret?
afan
Posts: 6796
Joined: Sun Jul 25, 2010 4:01 pm

Re: Unauthorized trading fidelity

Post by afan »

Hope this works out. It would be interesting to know what happened, but the speculation about a client error is persuasive so far.

Yet another reason not to have an margin account. When I buy, I always do day only, always for cash and do not have a margin account.
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
RubyTuesday
Posts: 1791
Joined: Fri Oct 19, 2012 11:24 am

Re: Unauthorized trading fidelity

Post by RubyTuesday »

Not to unfairly disparage OP, but none of this makes sense as reported.

Also, it would surprise me to learn that Fidelity (or Schwab or Vanguard) would ask you to fill out a police report for the reason of reducing claims of fraud that were actually buyer’s remorse. Have others had first hand experience with a broker suggesting you file a police report?

I would lay odds we will not hear back from OP, but I hope we do and if we don’t I hope this thread stays unlocked as it has been educational for me.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
User avatar
JoMoney
Posts: 13543
Joined: Tue Jul 23, 2013 5:31 am

Re: Unauthorized trading fidelity

Post by JoMoney »

RubyTuesday wrote: Tue Apr 05, 2022 5:21 pm... Have others had first hand experience with a broker suggesting you file a police report? ...
I've never had a case of fraud/theft from my brokerage or bank account, but I have had my identity stolen and used to open credit accounts, and I was required to file a police report and provide the police report/file# and info to get the matter corrected. The accounts that were opened and used were in a completely different state from me, so I doubt the local police department was doing any investigation of the matter, but that was the required process.

As I pointed out up-thread, Fidelity does say in their details about "Customer Protection Guarantee" that they may request a police report be filed.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Topic Author
Alex39
Posts: 5
Joined: Mon Apr 04, 2022 9:09 pm

Re: Unauthorized trading fidelity

Post by Alex39 »

Update: I filed a police report and send it to Fidelity for further investigation. Will post the outcome here.

FYI, I did margin trading two years ago and never did that again. Should have disabled margin trading (and will do that as soon as this is resolved).
I am not a trading savvy, so I always do market orders. Never traded options, GTC, or anything that is subject to forgetfulness.
User avatar
Tyler9000
Posts: 672
Joined: Fri Aug 21, 2015 11:57 am

Re: Unauthorized trading fidelity

Post by Tyler9000 »

TheTimeLord wrote: Tue Apr 05, 2022 3:33 pm What is OP thinks really isn't relevant to why Fidelity wants him to file a police report, I assume it is their standard procedure with he presented them.
In cases of reported fraud or account errors it's not uncommon for companies to require that the accuser file a police report. It's an easy way for them to quickly sort out the legitimate complaints from the customers with simple buyers remorse. That's because most people understand that it's one thing to blame someone else for your poor decision and another thing entirely to file a false report with the police.

Now that the OP has provided a police report number I expect Fidelity to have processes to evaluate it in more depth.
RetiredCSProf
Posts: 938
Joined: Tue Feb 28, 2017 4:59 pm

Re: Unauthorized trading fidelity

Post by RetiredCSProf »

Recently, I had a problem like this with a credit card I was holding at a small credit union with my previous employer. I opened the credit card about a year ago, but decided to close it when two monthly statements were lost in the mail (online statements are disabled).

I went into the credit union office (had to wear an N-95 mask for entry) to close the c/c account. The next week, I looked at their website to confirm the account was closed. Much to my surprise, it showed that a cash advance of $9500 had been taken on my credit card (my maximum credit was $10K) on the exact day that I was in their office closing the account.

When I called, the credit union explained that it was a "glitch" -- A client with an account# that was nearly identical to mine (off by one digit) had taken the cash advance. I had to call them again the following month when I received a statement showing that I owed interest on the cash withdrawal.

Is it possible that a similar event happened with the OP?
CodeMaster
Posts: 814
Joined: Sun Mar 18, 2007 3:03 pm

Re: Unauthorized trading fidelity

Post by CodeMaster »

Also enable 2FA to avoid unauthorized access from now on
rkhusky
Posts: 12617
Joined: Thu Aug 18, 2011 8:09 pm

Re: Unauthorized trading fidelity

Post by rkhusky »

CodeMaster wrote: Wed Apr 06, 2022 1:00 pm Also enable 2FA to avoid unauthorized access from now on
2FA doesn't help if it is someone at the brokerage making a mistake.
rkhusky
Posts: 12617
Joined: Thu Aug 18, 2011 8:09 pm

Re: Unauthorized trading fidelity

Post by rkhusky »

Tyler9000 wrote: Wed Apr 06, 2022 12:39 pm In cases of reported fraud or account errors it's not uncommon for companies to require that the accuser file a police report.
I would be very upset if a brokerage made me file a police report because they made a mistake. Especially if they could have easily looked up and given me the details of the transaction (date, time, method, IP address, phone number, etc).
michaelingp
Posts: 730
Joined: Tue Jan 17, 2017 8:46 pm

Re: Unauthorized trading fidelity

Post by michaelingp »

Alex39 wrote: Mon Apr 04, 2022 9:22 pm They said I should file a police report if I think my phone has been hacked.
I think all the posts that say, "File a police report" miss the word "if" here. OP doesn't think his phone has been hacked. He cannot truthfully file a police report saying his phone was hacked. I'm not even sure he could file a police report saying there was unauthorized activity on his Fidelity account. How would his local PD have jurisdiction? Plus Fidelity did not tell him straight out that the order came from his phone, which they would surely know. None of this makes any sense, but there we are.
User avatar
JamesSFO
Posts: 3345
Joined: Thu Apr 26, 2012 10:16 pm

Re: Unauthorized trading fidelity

Post by JamesSFO »

michaelingp wrote: Wed Apr 06, 2022 7:05 pm
Alex39 wrote: Mon Apr 04, 2022 9:22 pm They said I should file a police report if I think my phone has been hacked.
I think all the posts that say, "File a police report" miss the word "if" here. OP doesn't think his phone has been hacked. He cannot truthfully file a police report saying his phone was hacked. I'm not even sure he could file a police report saying there was unauthorized activity on his Fidelity account. How would his local PD have jurisdiction? Plus Fidelity did not tell him straight out that the order came from his phone, which they would surely know. None of this makes any sense, but there we are.
Someone up-thread quoted from the Fidelity protection guarantee that filing a police report is a condition of getting protection for hacking/etc.
radiowave
Posts: 2843
Joined: Thu Apr 30, 2015 5:01 pm

Re: Unauthorized trading fidelity

Post by radiowave »

OP, note, you can also lock outgoing transfers in Fidelity, just do a quick search and takes you to the page to do that. Agree with 2FA.
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page
Makefile
Posts: 1697
Joined: Fri Apr 22, 2016 11:03 pm

Re: Unauthorized trading fidelity

Post by Makefile »

Alex39 wrote: Wed Apr 06, 2022 12:10 pm Update: I filed a police report and send it to Fidelity for further investigation. Will post the outcome here.

FYI, I did margin trading two years ago and never did that again. Should have disabled margin trading (and will do that as soon as this is resolved).
I am not a trading savvy, so I always do market orders. Never traded options, GTC, or anything that is subject to forgetfulness.
Good luck. If you haven't already, perhaps look for the full-blown "trade confirmation" about this trade in your Fidelity account. I don't have one so I can't point to where it is. It will have more details than the summary web interface or statement.
rkhusky
Posts: 12617
Joined: Thu Aug 18, 2011 8:09 pm

Re: Unauthorized trading fidelity

Post by rkhusky »

JamesSFO wrote: Wed Apr 06, 2022 7:59 pm Someone up-thread quoted from the Fidelity protection guarantee that filing a police report is a condition of getting protection for hacking/etc.
No, the quote was that Fidelity may require a police report, among other ways of cooperating with an investigation.
Pete3
Posts: 239
Joined: Thu Jul 01, 2010 12:10 pm

Re: Unauthorized trading fidelity

Post by Pete3 »

I saw someone post here that you should disable the margin feature on the account and wanted to provide a counter-argument on why having a margin account is a good thing even if you never intend to purchase stocks on margin.

Having margin enabled allows for instant settlement rather than waiting for T+2 or whatever it is now, this avoids freeriding violations

This means if you sell a stock A and want to use those funds to purchase another stock B, you can do so immediately without waiting for the first sale transaction to settle and aren't limited on when you can then sell B.

Full details for those that want to read the nitty gritty : https://en.wikipedia.org/wiki/Free_ridi ... ck_market)
Leesbro63
Posts: 8147
Joined: Mon Nov 08, 2010 4:36 pm

Re: Unauthorized trading fidelity

Post by Leesbro63 »

Posts like this are concerning. That being said, we rarely hear about stuff like this. Makes me think the OP did something they didn’t realize they did.
richard.h.gao
Posts: 295
Joined: Tue Jan 18, 2022 12:34 pm

Re: Unauthorized trading fidelity

Post by richard.h.gao »

Pete3 wrote: Fri Apr 08, 2022 10:38 am This means if you sell a stock A and want to use those funds to purchase another stock B, you can do so immediately without waiting for the first sale transaction to settle and aren't limited on when you can then sell B.
That's only an issue if you purchased stock A with unsettled funds. That would not happen in a cash account
Pete3
Posts: 239
Joined: Thu Jul 01, 2010 12:10 pm

Re: Unauthorized trading fidelity

Post by Pete3 »

richard.h.gao wrote: Fri Apr 08, 2022 11:46 am
Pete3 wrote: Fri Apr 08, 2022 10:38 am This means if you sell a stock A and want to use those funds to purchase another stock B, you can do so immediately without waiting for the first sale transaction to settle and aren't limited on when you can then sell B.
That's only an issue if you purchased stock A with unsettled funds. That would not happen in a cash account
Please reread what I wrote "and aren't limited on when you can then sell B"

You are correct that you can sell A and then immediately buy B without waiting for A to settle, however then you cannot sell B until A has settled - basically you are stuck with B in your account until the funds from A clear.

https://www.fidelity.com/learning-cente ... violations

Good faith violation example, Marty:

Cash available to trade = $0.00
On Monday morning, Marty sells XYZ stock and nets $10,000 in cash account proceeds
On Monday afternoon, he buys ABC stock for $10,000
If Marty sells ABC stock prior to Wednesday (the settlement date of the XYZ sale), the transaction would be deemed a good faith violation because ABC stock was sold before the account had sufficient funds to fully pay for the purchase.
afan
Posts: 6796
Joined: Sun Jul 25, 2010 4:01 pm

Re: Unauthorized trading fidelity

Post by afan »

That is a great example of a trading pattern that most of us would say one should never do.
Buying the stock on Monday and selling on Wed? Is there a nonspeculative reason for doing this?

In any case, hardly worth having a margin account. Perhaps another good reason not to.
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
User avatar
somewhatentertained
Posts: 47
Joined: Thu Dec 14, 2017 7:19 pm

Re: Unauthorized trading fidelity

Post by somewhatentertained »

JamesSFO wrote: Wed Apr 06, 2022 7:59 pm
michaelingp wrote: Wed Apr 06, 2022 7:05 pm
Alex39 wrote: Mon Apr 04, 2022 9:22 pm They said I should file a police report if I think my phone has been hacked.
I think all the posts that say, "File a police report" miss the word "if" here. OP doesn't think his phone has been hacked. He cannot truthfully file a police report saying his phone was hacked. I'm not even sure he could file a police report saying there was unauthorized activity on his Fidelity account. How would his local PD have jurisdiction? Plus Fidelity did not tell him straight out that the order came from his phone, which they would surely know. None of this makes any sense, but there we are.
Someone up-thread quoted from the Fidelity protection guarantee that filing a police report is a condition of getting protection for hacking/etc.
Almost certainly the Fidelity representative heard "maybe my phone was hacked" and thought, "We have nothing to do with your phone, call the police then" and that's where the police report would come in. IMHO I do not think the OP phrased the concern over Fidelity activity correctly. I would never have mentioned a device, only the account activity to the Fidelity rep, as that is what they can handle. The speculation on the phone hack derailed a potential fraud investigation on Fidelity's part. I would call again and not mention anything about account access, merely about unrecognized activity.
RubyTuesday
Posts: 1791
Joined: Fri Oct 19, 2012 11:24 am

Re: Unauthorized trading fidelity

Post by RubyTuesday »

afan wrote: Fri Apr 08, 2022 1:21 pm That is a great example of a trading pattern that most of us would say one should never do.
Buying the stock on Monday and selling on Wed? Is there a nonspeculative reason for doing this?

In any case, hardly worth having a margin account. Perhaps another good reason not to.
Tax loss harvesting.
“Doing nothing is better than being busy doing nothing.” – Lao Tzu
afan
Posts: 6796
Joined: Sun Jul 25, 2010 4:01 pm

Re: Unauthorized trading fidelity

Post by afan »

No reason to sell on Wed having bought on Monday. Would not work for TLH.
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
lazynovice
Posts: 2754
Joined: Mon Apr 16, 2012 10:48 pm

Re: Unauthorized trading fidelity

Post by lazynovice »

afan wrote: Fri Apr 08, 2022 4:27 pm No reason to sell on Wed having bought on Monday. Would not work for TLH.
Why wouldn’t it work? If you lump sum a bonus on Monday and the market drops 2% on Tuesday and 1% on Wednesday, you might want to TLH on Wednesday. Speaking from experience….

I don’t have margin enabled so I waited.
folkher0
Posts: 510
Joined: Fri Dec 09, 2016 2:48 pm

Re: Unauthorized trading fidelity

Post by folkher0 »

afan wrote: Fri Apr 08, 2022 4:27 pm No reason to sell on Wed having bought on Monday. Would not work for TLH.
It works.

To clarify: if on Wednesday you sell the shares you bought on Monday at a loss, and don’t keep other shares that are substantially identically to the ones you sell within the 61 day window before and after the sell date, then you can claim the loss.
afan
Posts: 6796
Joined: Sun Jul 25, 2010 4:01 pm

Re: Unauthorized trading fidelity

Post by afan »

folkher0 wrote: Fri Apr 08, 2022 5:01 pm
afan wrote: Fri Apr 08, 2022 4:27 pm No reason to sell on Wed having bought on Monday. Would not work for TLH.
It works.

To clarify: if on Wednesday you sell the shares you bought on Monday at a loss, and don’t keep other shares that are substantially identically to the ones you sell within the 61 day window before and after the sell date, then you can claim the loss.
So the idea is to keep buying stocks that drop in 2 days and collect short term losses? Continually rotating into a new losing stock to avoid wash sales?

How about buying VTI and keeping it?
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
Pete3
Posts: 239
Joined: Thu Jul 01, 2010 12:10 pm

Re: Unauthorized trading fidelity

Post by Pete3 »

afan wrote: Fri Apr 08, 2022 1:21 pm That is a great example of a trading pattern that most of us would say one should never do.
Buying the stock on Monday and selling on Wed? Is there a nonspeculative reason for doing this?

In any case, hardly worth having a margin account. Perhaps another good reason not to.
I disagree, gives you more flexibility at no additional cost or risk.

Just because you personally don't see any value doesn't mean it doesn't have value to others.
User avatar
LadyGeek
Site Admin
Posts: 82372
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: Unauthorized trading fidelity

Post by LadyGeek »

The discussion is getting derailed on Tax loss harvesting. Please stay on-topic.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
JamesSFO
Posts: 3345
Joined: Thu Apr 26, 2012 10:16 pm

Re: Unauthorized trading fidelity

Post by JamesSFO »

Alex39 wrote: Mon Apr 04, 2022 9:22 pm Hi

Today 4/4, I noticed a margin debt of $~350k on my individual Fidelity account.
Turns out there has been a margin purchase of 1000 shares on 3/29 that resulted in this debt. I never placed this order and no one has access to my profile.
I am sure I did not see this activity on 3/30 when I did a small cash purchase on the account.
Interestingly, I never got a message in the app inbox or an email about the margin debt (I always get such messages about the margin debts, most recently three days before that).

I contacted fidelity and they said they don't see suspicious activity on my account, and the fact that I didn't get a message is an "electronic glitch". They said I should file a police report if I think my phone has been hacked.

I am absolutely sure this was an unauthorized purchase since (1) the number of shares is 1000 (not a random number) (2) I didn't get any notifications.

Any suggestions? Any similar experiences?
Thanks for the input
Just wondering if there is any update here from Fidelity?
User avatar
JazzTime
Posts: 226
Joined: Mon Oct 25, 2021 8:43 am

Re: Unauthorized trading fidelity

Post by JazzTime »

Alex39 wrote: Wed Apr 06, 2022 12:10 pm Update: I filed a police report and send it to Fidelity for further investigation. Will post the outcome here.

FYI, I did margin trading two years ago and never did that again. Should have disabled margin trading (and will do that as soon as this is resolved).
I am not a trading savvy, so I always do market orders. Never traded options, GTC, or anything that is subject to forgetfulness.
Any update?

It would be helpful to all of us if we knew precisely what happened. If it turned out to be your error, no need to be embarrassed - it can happen to the best of us. If it turned out to be Fidelity, we'd like to know how it happened and how it was resolved.
Hyperchicken
Posts: 1080
Joined: Mon Mar 02, 2020 5:33 pm

Re: Unauthorized trading fidelity

Post by Hyperchicken »

OP was last active on April 6th. Let's hope they come back with an update.
egri
Posts: 70
Joined: Mon Apr 04, 2022 10:22 pm

Re: Unauthorized trading fidelity

Post by egri »

This might not help OP, but Fidelity's subreddit, r/FidelityInvestments, has a very active mod team made up of Fidelity employees that is very responsive.
Post Reply