Liberty, MO asked in Consumer Law, Contracts and Banking for Missouri

Q: I opened a brokerage account with TD Ameritrade and tried to withdrawal but was told I could not withdrawal my money????

I opened a brokerage account with TD Ameritrade and deposited $1,500 by way of check. They put a hold on the check for 7 days which the check cleared it was wrote from my grandmother. So today after I was told that it cleared I tried to make a withdrawal for $200 and was told I could not withdraw from a brokerage account and at my account has now been frozen and I'm being investigated for fraud???? I feel like I have been robbed here can anybody give me some advice please not sure what to do. Their website States that you can withdraw money from a brokerage account at any time just like a regular bank account so I'm totally confused prior to today I had called twice to check on my deposit and was told that as soon as it cleared to connect my bank account to my TD Ameritrade account and transferred the money that I would like to withdraw. So I'm confused to say the least and now out $1,500 please help

1 Lawyer Answer
Jacob Rheaume
Jacob Rheaume
  • Business Law Lawyer
  • Chicago, IL

A: You're probably not out the $1,500. I would give them more time to conduct their investigation. If you haven't committed fraud, there's likely nothing to fear.

There are a lot of reason TD Ameritrade would put a hold on your funds; namely, you seem to be using a brokerage account as someone would use a checking or savings account. It's not fraudulent to do so, but it's unusual. You will find that your money is much easier to access in a standard checking account, my advice on a going-forward basis would be to not deposit funds into a brokerage account that you'll need to access in the short-term.

Do you have any pending transactions (i.e., have you bought and sold any securities in the time between the check clearing and trying to make the withdrawal)? If yes, they may put a hold on your funds in an amount greater that the buy order to ensure you can cover the position.

They may also want to look into your activity before releasing the funds. They have a lot of SEC requirements to comply with when it comes to cash trading accounts, and may want ensure that you're not engaging in common violative behavior (free riding, liquidation, good faith violations). All of this is to say, even if the check from your grandma is cleared, the funds may not be "settled" in the brokerage account the way they must be for them to be released to you.

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