The Legal Examiner Mark The Legal Examiner Mark The Legal Examiner Mark search twitter facebook feed linkedin instagram google-plus avvo phone envelope checkmark mail-reply spinner error close
Skip to main content

INTL FCStone, the clearing house for James Cordier and Michael Gross’ OptionSellers.com outfit, is attempting to collect from Optionsellers’ clients who lost their entire investment portfolios on margin. INTL FCStone has sent letters to OptionSellers’ clients stating that the “Current Net Liquidating Value is due” and “[a]ll past due amounts are subject to interest at a per annum rate of 1% plus The Wall Street Journal Prime Rate,” in addition to the “costs of collection.”

FCStone is providing account holders until December 15, 2018 to make remittances:

INTL FCStone “recognizes the losses to your account were substantial, and the remaining deficit is in addition to significant cash losses already sustained in your account. In order to provide additional time to transfer funds, IFCF has not demanded interest or fees on any amounts paid to date and does not intend to seek repayment of the interest and collection costs for any deficit amounts paid by December 15, 2018.”

INTL FCStone may have significant litigation exposure in this matter, as it has come to light that the clearing house allowed margin trading through Individual Retirement Accounts (IRAs). Such practice is frowned upon and may make INTL FCStone a target of securities lawyers pursuing these claims.

Read the INTL FCStone demand letter.

One Comment

  1. Gravatar for paul korn

    Tom, Thanks for article. The account application stated:

    THE RISK OF LOSS IN TRADING COMMODITY FUTURES/OPTIONS CAN BE SUBSTANTIAL. DUE TO THE HIGH DEGREE OF LEVERAGE

    THAT IS OBTAINABLE IN FUTURES TRADING, MARKET MOVEMENTS MAY BE BENEFICIAL OR DETRIMENTAL TO A CUSTOMER; NOTE

    THAT LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. MARKET MOVEMENTS MAY CAUSE A LOSS OF ALL CUSTOMER

    FUNDS DEPOSITED AS INITIAL MARGIN; AND SUBSTANTIAL AMOUNTS OF ADDITIONAL CAPITAL ABOVE AND BEYOND INITIAL MARGIN

    MAY BE NECESSARY. IN INSTANCES WHERE ADDITIONAL FUNDS ARE REQUIRED, BUT NOT DEPOSITED, POSITIONS COULD BE

    LIQUIDATED AT A LOSS. IN SUCH INSTANCES, THE CUSTOMER WOULD BE RESPONSIBLE FOR COVERING ANY SHORT FALLS.

    https://www.intlfcstone.com/Account-Forms/

    Optionsellers.com"s clients were aware that it primarily sold naked options.

    Do you think they can recover anything or escape liability for the negative balance in their account?

    Regards, Paul

Join the Discussion

Your email address will not be published. Required fields are marked *

Of Interest