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Planet money had a story where a similar superficially good idea ended up with Etrade selling a man's Amazon stock and deactivating his account after he didn't

by fedups 6y ago

Planet money had a story where a similar superficially good idea ended up with Etrade selling a man's Amazon stock and deactivating his account after he didn't log in for a certain period of time. He was able to reclaim about $8000 for stock that would be worth ~$100k today. https://www.npr.org/transcripts/799345159 https://www.npr.org/transcripts/799345159

JMTQp8lwXL 6y ago
This is mildly infuriating because the whole point of long term investing is to buy a stock, and well, do nothing -- besides hold it for decades. The stock should continue being held whether a user logs in or not.
- jedberg 6y ago
  > The stock should continue being held whether a user logs in or not. FWIW ETrade agrees with this. It wasn't their policy that closed the account, it was a law that was in theory to protect consumers... from themselves?
  - kevas 6y ago
    Shouldn’t that have gone to the state’s Auditor & Controller’s Unclaimed Property dept? If you look at California’s Unclaimed Prop., you’ll see shares sitting in there. Heck, I have a few shares I need to claim.
    - jedberg 6y ago
      Yes, but different states have different rules. Apparently in that guy's state, they won't take shares, only cash value of shares.
      - JMTQp8lwXL 6y ago
        This could work for you, in the chance an investment didn't pan out and you're liquidated at the top. But for long periods of time, cash loses value to inflation. Seems off that states wouldn't accept shares. They're not as liquid as cash, but not far from it.
    - brianpan 6y ago
      If I remember it did go to unclaimed property. The problem is that the stock today was worth much more than the selling price when they closed his account (and he intended it to be a long term holding).
- xmprt 6y ago
  Sounds like a lot of this could be fixed if the policy was to not sell the stock.
cdolan 6y ago
Perfect example. I forgot about this until now but I recall listening to this episode. Thank you!
jackdh 6y ago
For interested people. He didn't actually reclaim the $8000. Instead he is still fighting to get it's full potential worth.

by fedups 6y ago

JMTQp8lwXL 6y ago

This is mildly infuriating because the whole point of long term investing is to buy a stock, and well, do nothing -- besides hold it for decades. The stock should continue being held whether a user logs in or not.

jedberg 6y ago
> The stock should continue being held whether a user logs in or not. FWIW ETrade agrees with this. It wasn't their policy that closed the account, it was a law that was in theory to protect consumers... from themselves?
- kevas 6y ago
  Shouldn’t that have gone to the state’s Auditor & Controller’s Unclaimed Property dept? If you look at California’s Unclaimed Prop., you’ll see shares sitting in there. Heck, I have a few shares I need to claim.
  - jedberg 6y ago
    Yes, but different states have different rules. Apparently in that guy's state, they won't take shares, only cash value of shares.
    - JMTQp8lwXL 6y ago
      This could work for you, in the chance an investment didn't pan out and you're liquidated at the top. But for long periods of time, cash loses value to inflation. Seems off that states wouldn't accept shares. They're not as liquid as cash, but not far from it.
  - brianpan 6y ago
    If I remember it did go to unclaimed property. The problem is that the stock today was worth much more than the selling price when they closed his account (and he intended it to be a long term holding).
xmprt 6y ago
Sounds like a lot of this could be fixed if the policy was to not sell the stock.

cdolan 6y ago

Perfect example. I forgot about this until now but I recall listening to this episode. Thank you!

jackdh 6y ago

For interested people. He didn't actually reclaim the $8000. Instead he is still fighting to get it's full potential worth.