Traders Magazine, March 2004
Reg T Fines *Datek, iClearing, Ameritrade and Financial Services, LLC (Datek) all improperly extended credit to clients, violating federal securities laws, according to NASD. It has fined the firms $10 million. "NASD determined that the firms permitted cash account customers to purchase and sell securities in a series of trades without requiring full cash payment for each purchase in violation of Federal Reserve Regulation T," NASD said. The regulation stipulates that cash account clients must make full payment for each separate purchase without regard to the unsettled proceeds of any securities sold. The regulators claimed that the firms allowed clients to execute transactions based on proceeds due from unsettled trades. Datek and iClearing became affiliates of Ameritrade after a merger in September 2002.
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