Comments on: Worried About Your E*Trade Account?

By: customer

customer — Fri, 10 Oct 2008 21:06:37 +0000

The cash optimiser investment is decribed by etrade as:
“Hold fixed income, fixed income instruments, and money market funds”.
If you call CIPF and repeat this description they will tell you this is an investment and so losses are not covered. (It is different from cash sitting in the account which is covered.)
I called etrade to ask for some details on how the money was invested but they said they could not tell me… seems to be a secret!

By: Weekend Reading - Nov 15, 2007 | Million Dollar Journey

Weekend Reading - Nov 15, 2007 | Million Dollar Journey — Fri, 16 Nov 2007 07:32:31 +0000

[...] the show running? What will happen to your E-Trade account if they go bankrupt? Both Canadian Capitalist and Canadian Money Blogs Reviewer have answers to your questions. If you are looking for [...]

By: Dave

Dave — Thu, 15 Nov 2007 22:37:51 +0000

Yes I am at E*Trade Canada and to me the trouble/bother of moving somewhere else is more than it’s worth considering the likelihood of anything happening. And even if my assets (just an RRSP) were frozen for several months, no it wouldn’t bother me as they are essentially frozen now as I never sell and only buy something every few months.

By: nobleea

nobleea — Thu, 15 Nov 2007 16:02:03 +0000

Dave;

Do you have an account at E*Trade?

Yes, CIPF is there for a reason. They’ve never really been called to the task for a large scale bankruptcy of a brokerage. It could take months to sort it all out. Who wants to have their assets frozen for several months.

By: Jennie

Jennie — Thu, 15 Nov 2007 04:30:09 +0000

White Eagle: Most of the brokerage firms reimburse you the transfer cost / fees, if the assets transferred over is over $100K.

If I would transfer the money out from E*Trade, I would recommend ones belonging to Major Canadian Banks. I don’t trust small players investment philosophy, which is usually too risky and may invest customers cash somewhere in risky assets like CDO/non-bank ABCP for extra yield.

TD Waterhouse is my favorite choice (and I just submitted my transfer form today), because they are very conservative and safe. As of today, all the major banks announced their loss in the news related to sub-prime mortgages/or Non-Bank ABCP, except for TD — only TD.

By: Dave

Dave — Thu, 15 Nov 2007 01:43:02 +0000

Neil, please tell me, how would our assets get “lost”? CIPF is there for a reason. All this speculation of E*Trade going bankrupt is so ridiculous and premature.

By: Neil F

Neil F — Wed, 14 Nov 2007 16:20:32 +0000

One should always invest to a risk levl that they are comfortable . If you are a depositor at Etrade, and you are uncomfortable with the risk (be it real or perceived) of having your money there, and you cannot sleep at night then you should move it out. Faceless people posting realatively anonymously on the internet are not going to come riding in like a knight in shining armour to rescue your assets should they get tied up for several years, or worse lost. For all anyone reading this knows, the posters suggesting to keep your money in Etrade are trying to stem the panic long enough to get their own assets out. Last one holding the bag gets screwed. My transfer documents are complete and submitted. I’m sticking with a big bank from here on in.

By: nobleea

nobleea — Wed, 14 Nov 2007 00:17:10 +0000

Dave;

It’s not a knee jerk reaction. I understand that the whole hooplah was caused by one analyst’s comments (with perhaps some truth to them). Like I said, this was the final straw in a long list of mess ups, including:

Having me listed as an insider for a company (that I wasn’t)
Putting a cease trade order on a company for no reason (for all e-trade customers)
Having my cash balance mysteriously disappear, multiple times (in phone calls they couldn’t explain why it happened)
Having my cash balance affected by open orders for companies I have never heard of before (account hijack?)

Those suggesting withdrawing all your stock in certificates are those who are hyper-bearish on most banks, citing their huge exposure to Level 3 assets which include credit/default derivates (on CDO’s for example). These will have to be marked to market according to accounting regulations coming this week. But there is no market for these derivatives. So that would require large writedowns.

By: tom

tom — Tue, 13 Nov 2007 20:01:23 +0000

its important for everyone to remember that there are many other brokerages that would go out of their way to take over the brokerage accounts that etrade manages for us if anything was to happen to put the company’s solvency at risk.

rather than looking to move my account i am analyzing the stock to see if it too should be in my account…

remember: its at times like these that the smart (read: long term) money is made.

By: Dave

Dave — Tue, 13 Nov 2007 19:55:17 +0000

I would stay calm and not have a knee jerk reaction like nobleea here.

For a more fair reporting of this whole E*trade affair look here:
http://gigaom.com/2007/11/12/how-to-create-a-stock-panic-with-two-little-words/

Also check out this un-fair article here:
http://www.techcrunch.com/2007/11/13/etrade-heading-to-the-deadpool/
and then read some of the comments below, particularly these ones:
http://www.techcrunch.com/2007/11/13/etrade-heading-to-the-deadpool/#comment-1754012
http://www.techcrunch.com/2007/11/13/etrade-heading-to-the-deadpool/#comment-1754036
http://www.techcrunch.com/2007/11/13/etrade-heading-to-the-deadpool/#comment-1754192
http://www.techcrunch.com/2007/11/13/etrade-heading-to-the-deadpool/#comment-1754375
and many more…