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Granted, she was extraordinarily foolish to have gambled her entire life savings on one stock's IPO. However, this is where things fall apart for me: =========

Granted, she was extraordinarily foolish to have gambled her entire life savings on one stock's IPO. However, this is where things fall apart for me: ======================== She turned her attention to her computer screen only to realize that there was no sign of her having voided the order. She kept refreshing the page in hopes of seeing the notification. When no cancellation report appeared, she called her stockbroker at Vanguard. "What's going on?" she asked. If the cancel order was placed, then it's probably cancelled, the broker told her. She got off the phone and went back to her computer screen. There was no sign of cancellation. She called Vanguard again. This time, she says, she waited on the line for a long time, but no one came to take her call. Meanwhile, Facebook stock opened at 11:30 a.m. The mysterious delay was due to technical glitches. NASDAQ's electronic trading platform couldn't handle the high volume of trades. In the first 30 seconds, around 82 million shares were exchanged. ================== Am I reading this correctly that she attempted to cancel the order and it just failed? Is that really tolerable?

VLM 13y ago
She only lost about 10% of her life savings on that trade on the first day. "Her son advised her to hold onto her shares until she either resolved the matter with Vanguard or the price bounced back." That would be an interesting malpractice lawsuit, mom vs son. Just sayin. How dare her trade not profit! I know, file a lawsuit for a 400% rate of return for, um, well, not winning in the casino, thats what. This is what is known in the business as catching a falling knife. By the time the legal stuff wrapped up, she lost more like 90% of her life savings as the stock cratered. A legal maneuver attempting to cash in on the situation was the gamble that lost most of her money because she caught a falling knife and stubbornly refused to let go. Really its two back to back gambles both of which failed.
- jbooth 13y ago
  If she tried to cancel the order, the broker should have been able to cancel the order for her. They had over an hour to work with -- if it were their own money, it'd have been handled in milliseconds. It's standard to blow up the damages figure in the initial lawsuit filing. Big companies do this EVERY SINGLE TIME. Yet this woman does it and she's the greedy one who won't take responsibility? Vanguard had one job here, they failed at it, and they should have either settled with her for her first-day losses and no punitive damages immediately or lost in the lawsuit with bigger damages eventually. Of course, the game being what it is, they just won eventually.
  - VLM 13y ago
    "Vanguard had one job here, they failed at it" How so? She clicked buy, did she not? And she got exactly what she wanted. Quite awhile later, she changed her mind about what she wanted. Oh well. Its like buying a lottery ticket, then after the numbers are picked, deciding you don't want it anymore and trying to return it. You can get away with that kind of stuff at walmart or target, not so much at the lotto kiosk or the stock exchange. She had 12 years of stock trading experience per the article. Not as much as me, but she didn't exactly fall off the turnip truck the day before, either.
    - jbooth 13y ago
      Oh come on. She changed her mind over an hour before the market opened and they couldn't process her cancellation. She didn't ask for her money back after losing it, she asked to stop the trade before it was executed and they failed at that for over an hour. Are you seriously not getting that distinction? It's not like buying a lottery ticket and deciding you don't want it after the numbers are picked. It's like starting to buy a lottery ticket, then changing your mind, and the clerk punches you in the face and takes your wallet, giving you your lottery ticket anyways. I understand that it wasn't on purpose but in most industries if you fuck up and cost your customer a lot of money then they're going to have legal recourse against you.
theonewolf 13y ago
Yes, actually I remember that day. Transactions sent in even buys took hours and _hours_ to execute. I didn't know the final state of my fb trades until the next day. The problem as I understood it: (1) Consumer brokers often consolidate trades/buffer them up and send them on (2) More centralized entities actual have access directly to the trading systems and execute these batches of trades coming in (3) The trading system does it's magic and responds My understanding was that (2) and (3) became _incredibly_ overwhelmed and latency spiked, queues filled, and trades took _forever_ to go through. Unfortunately, the consumer broker is stuck at the mercy of waiting for responses from (2). So yes, they can take in customer requests, but they are not the ones that finally execute and latency can become huge.
- swalkergibson 13y ago
  Completely unacceptable, in my opinion. If I cancel the order, the expectation is that the order is cancelled. If it is not cancelled when I told it to cancel explicitly, then Vanguard is on the hook for that. The timestamps on the trades should be enough to illustrate what happened when.
  - mikestew 13y ago
    > the expectation is that the order is cancelled You need to adjust your expectations. When you enter an order, your only expectation should be that it gets filled, and not necessarily quickly (or at the price you'd like unless it's a limit order). Check with your broker, I'll guess that they make no guarantee about canceling orders. Using Fidelity as an example, when I cancel an order the page comes back with "attempting to cancel order" (emphasis mine). Someone fills the order before the cancellation makes it through? You just bought yourself some stock.
    - mbreese 13y ago
      In ordinary circumstances, yes this is all true. When the clusterfsck that was the Facebook IPO happens and the market shuts down for hours, no... there was time to cancel that order. If her order was sitting in a queue somewhere waiting to be executed, it should have been able to have been removed. If it wasn't, then Vanguard should have at least been able to tell her what its status was.

VLM 13y ago

She only lost about 10% of her life savings on that trade on the first day. "Her son advised her to hold onto her shares until she either resolved the matter with Vanguard or the price bounced back." That would be an interesting malpractice lawsuit, mom vs son. Just sayin. How dare her trade not profit! I know, file a lawsuit for a 400% rate of return for, um, well, not winning in the casino, thats what. This is what is known in the business as catching a falling knife. By the time the legal stuff wrapped up, she lost more like 90% of her life savings as the stock cratered. A legal maneuver attempting to cash in on the situation was the gamble that lost most of her money because she caught a falling knife and stubbornly refused to let go. Really its two back to back gambles both of which failed.

jbooth 13y ago
If she tried to cancel the order, the broker should have been able to cancel the order for her. They had over an hour to work with -- if it were their own money, it'd have been handled in milliseconds. It's standard to blow up the damages figure in the initial lawsuit filing. Big companies do this EVERY SINGLE TIME. Yet this woman does it and she's the greedy one who won't take responsibility? Vanguard had one job here, they failed at it, and they should have either settled with her for her first-day losses and no punitive damages immediately or lost in the lawsuit with bigger damages eventually. Of course, the game being what it is, they just won eventually.
- VLM 13y ago
  "Vanguard had one job here, they failed at it" How so? She clicked buy, did she not? And she got exactly what she wanted. Quite awhile later, she changed her mind about what she wanted. Oh well. Its like buying a lottery ticket, then after the numbers are picked, deciding you don't want it anymore and trying to return it. You can get away with that kind of stuff at walmart or target, not so much at the lotto kiosk or the stock exchange. She had 12 years of stock trading experience per the article. Not as much as me, but she didn't exactly fall off the turnip truck the day before, either.
  - jbooth 13y ago
    Oh come on. She changed her mind over an hour before the market opened and they couldn't process her cancellation. She didn't ask for her money back after losing it, she asked to stop the trade before it was executed and they failed at that for over an hour. Are you seriously not getting that distinction? It's not like buying a lottery ticket and deciding you don't want it after the numbers are picked. It's like starting to buy a lottery ticket, then changing your mind, and the clerk punches you in the face and takes your wallet, giving you your lottery ticket anyways. I understand that it wasn't on purpose but in most industries if you fuck up and cost your customer a lot of money then they're going to have legal recourse against you.

theonewolf 13y ago

Yes, actually I remember that day. Transactions sent in even buys took hours and _hours_ to execute. I didn't know the final state of my fb trades until the next day. The problem as I understood it: (1) Consumer brokers often consolidate trades/buffer them up and send them on (2) More centralized entities actual have access directly to the trading systems and execute these batches of trades coming in (3) The trading system does it's magic and responds My understanding was that (2) and (3) became _incredibly_ overwhelmed and latency spiked, queues filled, and trades took _forever_ to go through. Unfortunately, the consumer broker is stuck at the mercy of waiting for responses from (2). So yes, they can take in customer requests, but they are not the ones that finally execute and latency can become huge.

swalkergibson 13y ago
Completely unacceptable, in my opinion. If I cancel the order, the expectation is that the order is cancelled. If it is not cancelled when I told it to cancel explicitly, then Vanguard is on the hook for that. The timestamps on the trades should be enough to illustrate what happened when.
- mikestew 13y ago
  > the expectation is that the order is cancelled You need to adjust your expectations. When you enter an order, your only expectation should be that it gets filled, and not necessarily quickly (or at the price you'd like unless it's a limit order). Check with your broker, I'll guess that they make no guarantee about canceling orders. Using Fidelity as an example, when I cancel an order the page comes back with "attempting to cancel order" (emphasis mine). Someone fills the order before the cancellation makes it through? You just bought yourself some stock.
  - mbreese 13y ago
    In ordinary circumstances, yes this is all true. When the clusterfsck that was the Facebook IPO happens and the market shuts down for hours, no... there was time to cancel that order. If her order was sitting in a queue somewhere waiting to be executed, it should have been able to have been removed. If it wasn't, then Vanguard should have at least been able to tell her what its status was.