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Online Broker Lien/Collection

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Hi everyone,

Did a quick search, couldn't finding anything similiar so here goes... hopefully this will be useful to others as well.

FYI: I live in the state of California. Several years ago I had an online brokerage account (for stock trading). One day, the broker liquidated my account and left me with a debit balance of about $5000. They then demanded this money.

I disputed their claim based on if they followed their rules and advertisements on the policy to follow account would have never have had a debit balance and they owed me about $1700.

After several months of disputing the issue with them and various other regulatory agencies they engaged the services of a laywer-type of collection agency. The CA obviously wanted payment, at first full payment, then they kept going lower and lower... I kept disputing with them that this issue is between myself on the brokerage firm.

I wrote the brokerage firm a final letter saying that our dispute hasn't been resolved and that the next step is either we go to court (arbitation) on the issue or to credit my account for the debit balance plus amount that should have been left.

They did the latter several months later (about a year after the original dispute), bringing the account balance to zero, esentially "writing off", or "charging off" the balance, but they didn't issue me a check for the extra amount. I called them and they confirmed my account had a zero balance.

A year after this was balance was written off, I called them up asking if indeed my balance was zero and if I could open up a new account. They gave me a green light on both.

Fast forward to near the present time. This brokerage firm was bought by a new firm and now the NEW firm has not only demanded that I repay the unsecured debt, but they have also frozen the assets of the new account that I have had with the old firm for approximately one year.

Points for dicussion?

1) What is the status of the creditor now? Is it an original creditor... or did they just purchase the debt.

2) I have confirmation that my final account balance is zero. I have never been sent any other statements or letters stating I owe money.

3) The new firm has frozen the assets of my account worth approx $2000 and have threatened to liquidate it if I don't pay up.

4) I never signed any written agreement with the new firm, although I guess my accounts now belong to them.

5) How do I get control of my account back? Any other insights?

Thanks for your feedback for this interesting dilemma to say the least.



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