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Online Stock Trading Wrong Price - My Rights?

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Hi All,

I have an online trading account with a Big UK bank.
I bought some stock in a ISA Fund, they quoted an amount of stock, I accepted and the deal was done.

I then sold this about 1 week later. They are now saying that they sold me the wrong quantity and that I unduly profited from this ‘mistake’.

So now they want to buy back some of the stock and change me for it (putting my account balance into negative). Can they do this?

I think it is a price issue, they sold to me at one price and bought back at another, I gained from this. But if at a later date they say this price or quantity as a mistake.

I am I in the right to keep the profit. And can they charge me to buy more stock when I have not asked them to?

Thanks for your help.
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Comments

  • turbobob
    turbobob Posts: 1,500 Forumite
    They sold you the wrong quantity??? I don't follow really. Can you clarify what type of order you placed?

    I.e. was it a market order for a fixed monetary amount, for an uncertain number of shares? I.e. your order was say "buy £1000 of BP stock" and they tell you how many shares you can buy? Did they give you a formal quote which you accepted?
  • scottcoleman
    scottcoleman Posts: 10 Forumite
    Hey,

    It was for shares in the M&G American fund.
    I requested £1000 worth; they quoted me a price per share which equated to a certain quantity. I agreed and the trade was done. So I owned the shares in the fund (I have the invoice etc). I latter sold the shares, they quoted me a price, I accepted and they were sold. And I profited. Again I have the invoiced etc.

    But they are now saying they sold me the “wrong quantity”, and they want to amend the trade.

    My argument is that I requested £1000 worth of the shares, so they tell me a price and that determines the quantity, at the point I buy them. And then the price they quote me when I want to sell them determines my profit (or loss).

    So I think it is a price issue, and as so, they have not right to go back and change it?

    BP Example:
    Because I could of for example have bought BP shares the 1 week before the Gulf disaster, and then 2 weeks later after the stock had fallen dramatically, they could come back and say, “ow sorry we sold you them at the wrong price or the wrong quantity”.
    Well, seeing as the price of stocks changes all the time and different dealers will quote different prices. What is the definition of the "wrong price"? lol

    Any advice on this would be great
  • turbobob
    turbobob Posts: 1,500 Forumite
    I see. I thought you were dealing in shares. Funds like M&G American are a bit different because they are forward priced. The price you see is actually yesterdays price. This means you never know the price you will get on a buy or sell order. That is just the way they work. They are basically useless for short term trading purposes. If that is what you were interested in you would be better off using exchange traded funds which can be traded exactly like shares.
  • scottcoleman
    scottcoleman Posts: 10 Forumite
    My question is though.
    Can the bank I trade with, go back on the deal with me, and charge me money to buy shares with out my permission, to make up for the "incorrect" price they sold to me at?

    Are all deals final? And I can keep my profit?
  • turbobob
    turbobob Posts: 1,500 Forumite
    To be honest I've no idea. I've never heard of that. They sold you "the wrong quantity" - did they issue a contract note with the incorrect quantity of units on it? And they are now saying the contract note they issued was wrong? And they want you to buy units to make up for their mistake? That just sounds very strange if that is the case.
    My argument is that I requested £1000 worth of the shares, so they tell me a price and that determines the quantity, at the point I buy them. And then the price they quote me when I want to sell them determines my profit (or loss).

    So I think it is a price issue, and as so, they have not right to go back and change it?

    Like I said that is not how it works with unit trust/OEIC type funds. They would not be able to tell you that days price, they would only be able to tell you the previous days price. You can never know how many units you will be buying, nor how much you will actually get when you sell them until after the deal is done.
  • turbobob wrote: »
    To be honest I've no idea. I've never heard of that. They sold you "the wrong quantity" - did they issue a contract note with the incorrect quantity of units on it? And they are now saying the contract note they issued was wrong? And they want you to buy units to make up for their mistake? That just sounds very strange if that is the case.

    Thats correct, that's exactly what has happened, and my account with them now is in a negative balance. Are they allowed to that to? I think they have effectively traded with my money with out my permission...?

    turbobob wrote: »
    Like I said that is not how it works with unit trust/OEIC type funds. They would not be able to tell you that days price, they would only be able to tell you the previous days price. You can never know how many units you will be buying, nor how much you will actually get when you sell them until after the deal is done.

    That delay is not a problem, it took a few days for both the buy and the sell to go though. But that is not in dispute. Even after that delay, it is the price on the Invoice etc that they want to amend.

    Both the Buy and the Sell of the fund took a few days each, but I got the invoice for both and was happy with them both. They are now saying they were wrong and want to charge me the difference... and HAVE charged me the difference now (giving me a negative balance)
    What are my right? Can they do this?
  • cheerfulcat
    cheerfulcat Posts: 3,402 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Hi, scottcoleman,

    It might be helpful if you gave more specific details - on your contract notes, how many units does it say were purchased, and at what price? And how many were subsequently sold, and at what price?

    On what dates were the trades actually carried out?
  • scottcoleman
    scottcoleman Posts: 10 Forumite
    Hi thanks for your reply.

    The price they sold to me at was 0.996367 and then when I sold them later that week the price was 9.919002. The quantity for both the buy and the sell was the same.

    So it looks like the price was “wrong” from their point of view because of a decimal point issue. And their argument is that because they sold to me at the “wrong price” of 0.996367 I got more shares then they wanted me to. So when I sold these shares at 9.919002 I got more money then they think I should have.

    But the fact is these are the prices they sold to me at and bought from me at, they offered me these prices, I accepted, and the deals were done and I have the contact notes / invoices.

    So can they come back few weeks later and say, they want the difference back?
    Do they have the right?
    And are they just allowed to buy stock to make up the difference and charge me for it?

    Thanks
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    Not sure how far you could go with this. I am not sure what would happen if it came to court.

    You are getting 9x whatever you put in. If you want to put an end to it, I would haggle with the bank.

    Or you can hold out to see what the bank do, but I think in court the bank would win (but thats just what I think!). Which is why I would haggle.
  • cheerfulcat
    cheerfulcat Posts: 3,402 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    edited 9 July 2010 at 2:35PM

    But the fact is these are the prices they sold to me at and bought from me at, they offered me these prices, I accepted, and the deals were done and I have the contact notes / invoices.

    So can they come back few weeks later and say, they want the difference back?
    Do they have the right?
    And are they just allowed to buy stock to make up the difference and charge me for it?

    Those figures kind of change things. If it had been a question of a few pence here or there that would be one thing but to be honest I think that they are within their rights to try to correct the mistake considering the amount of money involved.

    My first reaction would be that the bank should have taken steps to unwind the deal(s) as soon as the mistake was spotted, preferably at no cost to you.

    However, you may have inadvertently put yourself in a bad position by selling so quickly; it could be argued by them that you noticed and sought to profit from the pricing mistake.

    ETA - sorry, meant to say that yes, I think that they may well be within their rights but I'm not sure that they are allowed to put you into a position where the balance in your ISA is negative. Are there other holdings in there?
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