5 ms·

Online Brokerage Zecco Pretends To Give Away Millions, Panics When People Start Spending

40 points by peter123 18y ago

wayne 18y ago
First the SlideShare fiasco (http://mashable.com/2009/04/01/slideshare-april-fools/ http://mashable.com/2009/04/01/slideshare-april-fools/) and now this. April Fool's on the web is so stupid. I don't know why companies are so willing to bet their reputations for a chance at hilarity.
- jibiki 18y ago
  I thought the slideshare thing was funny, although probably not good for business. This, on the other hand, is borderline malicious; there is no way in hell I would use their service now.
markbao 18y ago
It's ludicrous for a stock brokerage with real mony at risk to pull an April Fools prank, let alone one that deals with a trader's buying power/balances. Ridiculous. Plus, I'm sure that there's some kind of SEC rule dealing with accurate reporting of a trader's balance. I doubt they did any due diligence before pulling this. (Or as kirse said, it could have been a bug—a very serious, untimely bug.)
- chris11 18y ago
  Right now, I am having trouble believing that this was a prank. I just can't believe that anyone would be stupid enough to do this. And if it were a prank, why would Zecco let trades be executed? I doubt that any prankster would want the company to be executing millions of dollars of invalid trades. I have a lot easier time believing this was an untimely bug.
  - patio11 18y ago
    I just can't believe that anyone would be stupid enough to do this Seriously. They're in a hyper-regulated, extraordinarily conservative industry. It would be like your doctor coming over and saying "Hey, bad news chap, you've got pancreatic cancer and have about 6 hours to live" for the lulz.
    - sam_in_nyc 18y ago
      I would pay for that. And also, for somebody to sneak into my apartment and set all the clocks fast by 10 minutes.
- sam_in_nyc 18y ago
  I use Zecco... but unfortunately didn't check it out for April Fool's. I guess I was thinking too rationally, at the moment. But if I did see a balance for millions, being a hacker, I certainly would have invested every dollar of it into some highly volatile and ridiculous stock. I wouldn't expect it to execute. My questions are the same. How could they even think of doing such a stupid prank.. and then on top of that, allowing it to execute. Two orders of magnitude stupid. I think the SEC should investigate, because it looked like on the morning of April 1st, Zecco had $1m+ per user on margin. There's no way they could have actually had that cash on hand if people did an "investment run." This really could have put Zecco under, and made a mess for whoever is backing them, and the FDIC. Disclosure: I hardly know anything about finance.
kirse 18y ago
Before everyone gets up in arms... how do we know this was an April Fool's joke and not an unfortunate glitch? All I'm seeing is this website calling it a joke with no real justification. Secondly, I'd be curious to see the intraday charts for the stocks that were purchased, just to see the effect this may have had. Thirdly, everyone knows that Zecco sucks and if you want a great social-networking broker, go with TradeKing.
- ashleyw 18y ago
  Kinda related — does anyone know the best/cheapest online broker in the UK? TradeKing looks awesome at $4.95/trade, but the best I've found so far are around $20/trade! :(
dkokelley 18y ago
This has all the markings of a good class-action suit. Zecco betrayed their duty of accurate account reporting (whether intentional as a 4/1 gag or unintentionally as a bug), and their customers acted on that information - to their harm. Am I missing anything here? I have a Zecco account (that I've never really used). I wonder if I'd be included in any class-action.
dbr 18y ago
If customers took the loss when stocks were traded with the money, did they also take the gains? It would be pretty bad if Zecco stuck customers with the loses from losing trades, but took the gains from the profitable trades.
- ztravis 18y ago
  A roommate of a personal friend was allowed to keep ~$600 in profits from trades using this 'fake' buying power after making a large stock purchase. Perhaps hearsay, but I'm inclined to believe that this really happened.
  - icey 18y ago
    "A roommate of a personal friend"... that's pretty much the definition of hearsay.
- krschultz 18y ago
  It sounds like what they actually did was increase your credit line, not your balance. So if people made trades on the (larger than normal) margin and profited, they can keep the profit. If they took losses, they are responsible for losses, slightly better than altering balances, but only slightly. It is pretty much the definition of giving your users enough rope to hang themselves with. It is an INCREDIBLY STUPID move on the part of Zecco. While it could be an accident or bug, I believe that it is too much of a coincidence to be chance.
mahmud 18y ago
"In Smart Money Magazine's 2008 Broker Survey, Smart Money named Zecco as one of the worst in the customer service category. [6]." http://en.wikipedia.org/wiki/Zecco.com#Criticisms http://en.wikipedia.org/wiki/Zecco.com#Criticisms
aka 18y ago
Consumorist article has been pulled. Zecco say it was a glitch not a joke: http://www.zecco.com/forums/Important-Message-from-Zecco-Tradin-53227_1.aspx http://www.zecco.com/forums/Important-Message-from-Zecco-Tra...
- Eliezer 18y ago
  Perhaps a prank on Zecco not by Zecco.
- adamhowell 18y ago
  Wow, I can't believe Consumorist just pulls stories when they're wrong. It's called "(Updated)", even TechCrunch knows that. This particular instance obviously isn't that big a deal, but things like this make me worried for our paperless futures.
  - aka 18y ago
    Look at that - Consumorist listened to you :) Story is back online again, with an update

40 points by peter123 18y ago

wayne 18y ago

First the SlideShare fiasco (http://mashable.com/2009/04/01/slideshare-april-fools/ http://mashable.com/2009/04/01/slideshare-april-fools/) and now this. April Fool's on the web is so stupid. I don't know why companies are so willing to bet their reputations for a chance at hilarity.

jibiki 18y ago
I thought the slideshare thing was funny, although probably not good for business. This, on the other hand, is borderline malicious; there is no way in hell I would use their service now.

markbao 18y ago

It's ludicrous for a stock brokerage with real mony at risk to pull an April Fools prank, let alone one that deals with a trader's buying power/balances. Ridiculous. Plus, I'm sure that there's some kind of SEC rule dealing with accurate reporting of a trader's balance. I doubt they did any due diligence before pulling this. (Or as kirse said, it could have been a bug—a very serious, untimely bug.)

chris11 18y ago
Right now, I am having trouble believing that this was a prank. I just can't believe that anyone would be stupid enough to do this. And if it were a prank, why would Zecco let trades be executed? I doubt that any prankster would want the company to be executing millions of dollars of invalid trades. I have a lot easier time believing this was an untimely bug.
- patio11 18y ago
  I just can't believe that anyone would be stupid enough to do this Seriously. They're in a hyper-regulated, extraordinarily conservative industry. It would be like your doctor coming over and saying "Hey, bad news chap, you've got pancreatic cancer and have about 6 hours to live" for the lulz.
  - sam_in_nyc 18y ago
    I would pay for that. And also, for somebody to sneak into my apartment and set all the clocks fast by 10 minutes.
sam_in_nyc 18y ago
I use Zecco... but unfortunately didn't check it out for April Fool's. I guess I was thinking too rationally, at the moment. But if I did see a balance for millions, being a hacker, I certainly would have invested every dollar of it into some highly volatile and ridiculous stock. I wouldn't expect it to execute. My questions are the same. How could they even think of doing such a stupid prank.. and then on top of that, allowing it to execute. Two orders of magnitude stupid. I think the SEC should investigate, because it looked like on the morning of April 1st, Zecco had $1m+ per user on margin. There's no way they could have actually had that cash on hand if people did an "investment run." This really could have put Zecco under, and made a mess for whoever is backing them, and the FDIC. Disclosure: I hardly know anything about finance.

kirse 18y ago

Before everyone gets up in arms... how do we know this was an April Fool's joke and not an unfortunate glitch? All I'm seeing is this website calling it a joke with no real justification. Secondly, I'd be curious to see the intraday charts for the stocks that were purchased, just to see the effect this may have had. Thirdly, everyone knows that Zecco sucks and if you want a great social-networking broker, go with TradeKing.

ashleyw 18y ago
Kinda related — does anyone know the best/cheapest online broker in the UK? TradeKing looks awesome at $4.95/trade, but the best I've found so far are around $20/trade! :(

dkokelley 18y ago

This has all the markings of a good class-action suit. Zecco betrayed their duty of accurate account reporting (whether intentional as a 4/1 gag or unintentionally as a bug), and their customers acted on that information - to their harm. Am I missing anything here? I have a Zecco account (that I've never really used). I wonder if I'd be included in any class-action.

dbr 18y ago

If customers took the loss when stocks were traded with the money, did they also take the gains? It would be pretty bad if Zecco stuck customers with the loses from losing trades, but took the gains from the profitable trades.

ztravis 18y ago
A roommate of a personal friend was allowed to keep ~$600 in profits from trades using this 'fake' buying power after making a large stock purchase. Perhaps hearsay, but I'm inclined to believe that this really happened.
- icey 18y ago
  "A roommate of a personal friend"... that's pretty much the definition of hearsay.
krschultz 18y ago
It sounds like what they actually did was increase your credit line, not your balance. So if people made trades on the (larger than normal) margin and profited, they can keep the profit. If they took losses, they are responsible for losses, slightly better than altering balances, but only slightly. It is pretty much the definition of giving your users enough rope to hang themselves with. It is an INCREDIBLY STUPID move on the part of Zecco. While it could be an accident or bug, I believe that it is too much of a coincidence to be chance.

mahmud 18y ago

"In Smart Money Magazine's 2008 Broker Survey, Smart Money named Zecco as one of the worst in the customer service category. [6]." http://en.wikipedia.org/wiki/Zecco.com#Criticisms http://en.wikipedia.org/wiki/Zecco.com#Criticisms

aka 18y ago

Consumorist article has been pulled. Zecco say it was a glitch not a joke: http://www.zecco.com/forums/Important-Message-from-Zecco-Tradin-53227_1.aspx http://www.zecco.com/forums/Important-Message-from-Zecco-Tra...

Eliezer 18y ago
Perhaps a prank on Zecco not by Zecco.
adamhowell 18y ago
Wow, I can't believe Consumorist just pulls stories when they're wrong. It's called "(Updated)", even TechCrunch knows that. This particular instance obviously isn't that big a deal, but things like this make me worried for our paperless futures.
- aka 18y ago
  Look at that - Consumorist listened to you :) Story is back online again, with an update