Fraud in your account?
Here's a few things to look for.
​Inaccurate/Mismatched Transaction Dates (you're on this page now)
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Unrecognized Losses at End of Month
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Inaccurate Transaction Dates Indicate Unreported Positions
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​​In 2023, a FINRA Disciplinary Action issued against Barclay's Capital affirmed that the type of error at issue here caused there to be transactions to go unreported. Not only can such errors be exploited to manipulate asset prices, but also the funds involved in said transactions may be missing from the accounting as well.
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We'll start by explaining the error, then we'll take a closer look at the FINRA Disciplinary Action.
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Charles Fraud highly encourages you to inspect your own brokerage statements to check whether the same types of errors exist. If you find something, let me know.
Inconsistent Reporting of Transaction Dates
Referenced below are excerpts from my Schwab Brokerage Statement. The complete brokerage statement for March 2018 can be accessed via the link below or by clicking on any of the excerpts.
At issue here is the Short Sale of 50 Options Contracts that, according to the Realized Gain or (Loss) section and shown in the excerpt below, was a position that was both Opened and Closed on the same day, 3/23/2018. The problem, as we'll see below, is that the Transaction Detail section reports different dates for those transactions.
March Brokerage Statement - Page 12
The Transaction Detail - Purchases and Sales section reports different dates for those transactions:
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First, the "Short Sale" - opening the position - is reported with a "Trade Date" of March 21, differing from the "Realized Gain (or Loss)" accounting which reports the position opening on March 23.
March Brokerage Statement - Page 19
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​​And the "Cover Short" transaction (the purchase closing the Short Sale position) is reported with "Trade Date" of March 22.
March Brokerage Statement - Page 21
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In reality, both positions could have existed, but the brokerage statement reports the transaction data for only one set of transactions. The "Transaction Detail" is missing the day trade transactions that occurred on March 23 - as reported by the "Realized Gain (or Loss)" section of the brokerage statement.(which reports the data for the March 21 and 22 transactions but with incorrect dates)
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Standing alone, this discrepancy is not proof of theft or fraud. After all, if positions are indeed missing, and the funds involved in those transactions have also disappeared, then by all means there should be other indications of missing funds, erroneous gain/loss accounting, and that the historical data was missing from the account. In my case, I have all the above:
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Indeed, I have proof that the historical balance data was altered to remove over $23k that, according to the official records, never existed. (ALL Short Sales were misreported in the Realized Gain (or Loss) accounting, as explained in Section B.)
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Also, it is important to note that EVERY Short Sale was misreported similarly by the March Brokerage Statement, including several instances whereby options positions are reported being Opened and Closed AFTER the Options contract had expired!​​​​​
2023 FINRA DISCIPLINARY ACTION CONFIRMS THAT THIS TYPE OF ERROR INDICATES "
POSITIONS MISSING FROM THE RECORD"
The FINRA Disciplinary Action against Barclay's Bank was a compelling revelation, for it directly affirmed that the exact species of error as presented above indeed corresponded to transactions missing from the record.
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Specifically, Barclay's consented to the finding that:
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"[C]oding errors caused positions that were either booked or rebooked after the trade date to be reported with a trade date that was later than the actual trade date. As a result, positions were not reported during the time between the actual trade date and the later, incorrectly reported trade date" (FINRA A.W.C. No. 2019061076001)
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Indeed, Charles Fraud has significant proof of CODING ERRORS that coincided with the erroneous accounting.
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From FINRA Letter of"Acceptance, Waiver, and Consent
A.W.C No. 2019061076001
