Forced exercise of options in an IRA

[Dan C]

Jurisdiction

Illinois

I hold an IRA self-directed account with one of the largest broker-dealers/investment advisors in the country. Recently, a cash-bought covered put expired in the money in my account. When I looked at my transaction history, it turned out that the put was not exercised but instead forcibly sold without any warning for less than its actual value with a substantial additional fee assessed. So far, the broker-dealer has refused to admit fault or do anything other than refund the fee. My loss is small, however, I am concerned that this broker-dealer is bilking other small investors out of their money the same way. Other than filing a complaint with FINRA, what else can I do? Thanks.

 

[Tax Counsel]

Other than filing a complaint with FINRA, what else can I do? Thanks.

You could sue for your loss unless your contract with the financial services firm requires you to arbitrate any disputes you have with it. If the contract requires arbitration then you follow the rules for arbitration in the contract. If your loss is small it might not be worth the effort. There is nothing you can about what the financial services firm may be doing to other customers aside from complaints to the relevant government agencies.

 

[adjusterjack]

Other than filing a complaint with FINRA, what else can I do?

How about moving your account someplace else?