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Market maker pricing error ADVICE PLEASE
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John Roycroft
Posted: 27 December 2012 15:56:29(UTC)
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Joined: 10/12/2010(UTC)
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On 24/12 I sold my shares in XGLI for US237 as they had risen by 49% in one day.
On 27/12 I was called by my online stockbroker to say that the Market Maker had made an error and that the trade had to be reversed or completed at the correct price of US160.
I argued that I had purchased the shares in good faith and that the Market Maker should accept the loss as they had made the mistake.
I said that I would seek advice before giving permission to change the transaction which the person I was speaking to accepted. When I logged on I found that the trade had already been reversed. Where do I stand on this?
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Roydo
Posted: 27 December 2012 19:32:42(UTC)
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Joined: 10/02/2012(UTC)
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Very annoying, but I would expect their small print covers mispricing, (bothways). Didnt a 49% rise on Christmas Eve seem a bit odd though?
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John Roycroft
Posted: 28 December 2012 06:55:35(UTC)
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Joined: 10/12/2010(UTC)
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Thanks Roydo - I think you're probably right about the small print.
Yes the 49% rise did seem bizarre - my first thoughts were that it was a computing error. However, if a fund is offered at a specific price then it seems unreasonable that they are not obliged to accept transactions even if the price is an error.
In this case, 'seller beware' should apply perhaps.
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