A user had a short position opened against their consent and without their notice in a cash account with IBKR (Interactive Brokers)
Upon discussion with a representative, the IBKR rep said that this is true and that it was due to ‘corporate action’. Basically admitting to the illegal action or infraction.
Here is the chat log;
Here are the important parts;
“It’s illegal to open short positions for me” – user
“Yes its a cash account so I understand that but due to corporate action It happened” -IBKR rep
So, Corporate IBKR did something illegal for it’s users.
This was all in a cash account.
All the more reason not to trust brokers.
Because Brokers aren’t your friends.
I’m sure IBKR will do some PR or something to clarify that this was all some misunderstanding and that the Rep was misinformed or some other form of psychologically gaslighting to save face. But the point still stands after their PR Damage Control. That point is;
Brokers aren’t your friends.
They’re in it to make money as the middle man, and if they can make more money fleecing off of you, then they will. Historically, all brokers have succumbed to this in one form or another. Just look throughout the 1920s Great Depression. Yea, and with models like Payment for order flow (PFOF), they are definitely making a dime off your back.
And who’s to say any of them (these so called ‘brokers’) even had any of your shares? That question might sound like a mighty ask, but it’s within the realm of bids to me. Connect the dots.
Even cash accounts aren’t safe.
Nothing is safe. Hence;
No Safe Bets
*Not Valid Financial, Legal, Life, or Any Advice