An arbitration panel in the US has ordered E*Trade Securities,
Inc., the company behind the financial web site etrade.com, to pay
a total of $38,226 to compensate one of its customers, Morgan
Roach, for investment related losses as a result of a misstatement
on its site.31 Oct 2000
At the hearing, Mr. Roach proved that E*Trade misstated the pricing of America Online share options during AOL's merger with Netscape. When Mr. Roach traded based on this erroneous information his account was wiped out and a debit balance was created. E*Trade then sent Mr. Roach's account to a collection agency and provided derogatory information to a credit reporting bureau.
One of the Californian lawyers for Mr. Roach, Robert Uhl, said the case sends a message to E*Trade that “when firms make mistakes, regardless of whether they are full service brick and mortar types or internet based, they all have an obligation to act fairly when they deal with their customers.”