messy situation....

sadperson_2

Hello,

In the past 4 weeks I have managed to make a total mess. Basically I bought some shares via HSBC share dealing (They offer a free 10k share buy "overdraft" instantly). They then collect the money from the current account which should be linked to the bank. I had some money due to be paid back from my ex brother in law but he basically managed to do a runner (with my 40 k) but thats another story....... Anyway the lack of funds left my HSBC current account with a 10k overdraft, at this point my shares went down about 50% (I am not the world best investor I must say).

HSBC sharedealing offered me another 10k to buy shares, which I took to try to average down..... at the same time I had a couple of buy orders which I tried to cancel but these went throught anyway. Anyway this left me with about 30K of shares.......obviously HSBC sharedealing took the money from my bank account, and hence my current account was left with an overdraft of 30k .... at the same time the value of the shares I purchased decreased quite a lot.

Last week I spoke to someone from HSBC and they said that I would obviously need to pay the money. I did explain that in the next couple of weeks I would get the funds (that is what I thought) and we left it like that.

2 days ago HSBC sharedealing sold all my shares without my permission. Due to the decrease of the share value I am now 13k down.... and the money transferred to my current account.

I have now gone in the red with my current account 13k.... I had an arranged overdraft of about 2k and with the decreased value in the shares 13k (hope it make sense).

I went to see HSBC this morning to try and see what could be done. They said they can not help but I would need to ring HSBC collection as I would need to deal with them directly.

Has anyone got any experience with them? Any idea what they might propose? (I have alwasy been a model customer keeping my payments on anything etc)....

Were share dealing in the right to take 30k from an account which had a balance of 200 pounds and hence leaving the account (until the shares were sold) with an overdraft of 30K (10 k one day and another 20 k in different days)....or HSBC current account should have refused the payment to HSBC share dealing?

Were HSBC share dealing in their right to sell the shares without my consent? (and due to the decrease in value I am now about 13 k out of pocket) I know I have been a total moron, but now the mess has been made and wonder what rights they had etc.....any advice would be very much appreciated!

MyLastFiver

Hang on - so you bought 10K of banking shares, which are currently plummeting, with 10K that you didn't have, then in order to help the problem you bought some more? With another 10K you didn't have? And then you forgot to cancel another ten grand's worth of buy orders? You must be in a different financial league to me, and have a different attitude to risk.

HSBC collections are utter, utter retards and are unlikely to be able to assist. You need to find out why HSBC saw fit to sell your shares. Were they exercising right of set-off, because you had a delinquent debt in one part of their business (ie the overdraft) and assets in another? (your shares). I would get their explanation and take it straight to a good solicitor to check the facts and the points of law.

Ignore HSBC call centres - you will get nowhere. This is not a question of a £12 overdraft charge - this is 13 grand. Take legal advice straight away.

sadperson_2

Thank you. Yes I had about 40K which were due to arrive 2 weeks ago but my brother in law decided to basically do a run.. and hence I am trying to recoup that but who knows how long it would take.

MyLastFiver

Sorry sadperson - I just reread my post and it sounds quite judgemental - my apologies and I hope your solicitor finds that HSBC acted improperly and you get your £13K back.

kazwookie

You 'invested' money you never had, you should have waiting till your bother in law paid you the money he owed you.

Shares in the current climate are not a good option.

You owe the bank ,so pay up, and also chase your brother

hypno06

Ok, this is my take on it, as a stockbroker.....

first go back and read the terms and conditions of the "share buy overdraft" thing because this will probably specify that if you have not settled your purchase with them within X days, they will have the right to sell the shares in order that they can settle with the market.

HSBC will have bought these shares in the market and they have to settle the trade - if you do not settle with them, they cannot settle with the market. They (HSBC) cannot be expected to pay for the shares themselves because they will then be taking on the risk of whether they go up or down in value, and if they do not settle with the market, they receive late settlement fines which obviously they do not want to take on.

It would be fairly standard practice for any stockbroking outfit to have the ability to "close the transaction" in order to clear the books with the market, and that would mean selling your holding and you then accounting for the balance.

As for whether they should have executed the initial 3 transactions when you only had £200 in the bank, just because they offer you the facility doesn't mean you have to take them up on it. Sadly, I don't think you have a great deal of comeback here.

Read the terms and conditions as a starting point though and see what they say.

Wol2

Hi Sadperson

I think MYlastFiver has the practical aspects sorted on this. ....and without wishing to send your thread in a different direction, I'd just like to say that the defult by a family member that leads you into this situation can be " an emotional event". You are clearly keeping your wits about you which is good.....but wanted to send hugs about the family side of things...........

xxx
Wol2
xxx

sadperson_2

Wol2 thank you very much indeed. Yes very emotional etc. However I am aware I would need to sort out the mess with the bank.

sadperson_2

kazwookie wrote: »

You 'invested' money you never had, you should have waiting till your bother in law paid you the money he owed you.

Shares in the current climate are not a good option.

You owe the bank ,so pay up, and also chase your brother

I am not saying I am NOT going to pay up, with regards to the money owned to me it is a different matter (the money would have as well been in my bank account... he would have managed to do a run anyway..........)

If you read my questions you would see what my main points were.

Thanks

consultant31

kazwookie wrote: »

You 'invested' money you never had, you should have waiting till your bother in law paid you the money he owed you.

Shares in the current climate are not a good option.

You owe the bank ,so pay up, and also chase your brother

As helpful posts go, this must be a winner!!!

The OP already knows the above but was asking whether HSBC had acted improperly.

OP, I sincerely hope you, or the law, catch up with your ex-BIL, he sounds a really special person :mad:

sadperson_2

hypno06 wrote: »

Ok, this is my take on it, as a stockbroker.....

first go back and read the terms and conditions of the "share buy overdraft" thing because this will probably specify that if you have not settled your purchase with them within X days, they will have the right to sell the shares in order that they can settle with the market.

HSBC will have bought these shares in the market and they have to settle the trade - if you do not settle with them, they cannot settle with the market. They (HSBC) cannot be expected to pay for the shares themselves because they will then be taking on the risk of whether they go up or down in value, and if they do not settle with the market, they receive late settlement fines which obviously they do not want to take on.

It would be fairly standard practice for any stockbroking outfit to have the ability to "close the transaction" in order to clear the books with the market, and that would mean selling your holding and you then accounting for the balance.

As for whether they should have executed the initial 3 transactions when you only had £200 in the bank, just because they offer you the facility doesn't mean you have to take them up on it. Sadly, I don't think you have a great deal of comeback here.

Read the terms and conditions as a starting point though and see what they say.

Hi, got your points, the problem is that the Shares were actually settled by HSBC sharedealing by taking the money from my current account with an overdraft facility of 2k, they took 10k from my current account on 3 different occasions. Totaling 30k. I had a standing order for a mobile line rental on that account and for obvious reasons that was rejected (sorted it out straight away with the phone provider). However the money from Sharedealing was actually allowed to be taken? I am not trying to find any guilty parties (I know I messed up big time) but I was wondering if HSBC Banks should have refused to have my account to go on 30k down regardless of who wanted the money (ie phone line rental, sharedealing or anyone else). As in the case of the phone operator they actually refused the payment on the contrary with sharedealing they accepted that..... and they decided to sell all my holidngs in shares without prior notice?