A telecommunications company based in Flushing , N.Y. , is accusing online broker Ameritrade of delaying orders to buy and sell stock, the Associated Press reported yesterday.
"Some of the trades 1/4were delayed by hours," said attorney Max Folkenflik, who filed the lawsuit for Telco Group on behalf of all Ameritrade customers since April of 2000.
The class action suit claims Ameritrade cost those investors more than $100 million.
Telco said it placed an order to buy 175,000 shares on the Nasdaq last year when the high price was $37.54 per share and the low price was $37.53. The transaction was received at 3:05 p.m. but not executed until 4:20 p.m., when shares were trading at $37.68. Telco lost $26,250, according to the lawsuit. Ameritrade has advertised that, between August 2003 and January 2004, it took less than three seconds to process all trades.
An Ameritrade spokeswoman declined comment on the lawsuit, the AP reported.
Ameritrade is fighting another class action suit filed by David Zannini of Angier , N.C. , that claims glitches in the company's trade processing are from antiquated systems and too few employees. A third lawsuit against Ameritrade was dismissed and is under appeal. In that suit it is claimed that "stale" pricing cost an investor, Mitchell Green of Los Angeles , money.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
