Fidelity Accidentally Liquidated my 401K

[Texas Proud]

I kept those scenarios out to simplify, but again I get the benefit of the doubt either way. As well, they should have to at least use all the money they pulled back to buy shares in my account, i.e. they shouldn't be making a profit on their error with they money they liquidated from me, which is what you're suggesting.

I will disagree with your thought process...


My example... you have 100 shares of XYZ before they liquidate...


They replace those 100 shares of XYZ... you are made whole..


Unless you can prove that you buy and sell all of the 100 shares you get nothing else... not history of selling everything then there is no way you were going to sell everything...



But using your example...



You had 100 of XYZ that they sold and moved the money... they got it back but XYZ gained in price and your money could not only buy 90 shares... would you accept that? I mean you got ALL of your money back using your logic... too bad you lost out on the gain...


Since you would not agree to the 90 if the market goes up, then you should not get more than 100 shares if the market goes down...

 

[cat4ever]

I haven't been moved off my original premise, and here's some extra food for thought, although I don't think any of this should play into my three tenants listed below for a situation such as this...

In the month previous to this happening I withdrew 300K in cash from the account. You have no idea what I would have done in this 2 week period, and moving more money into the stable fund is certainly not out of the question. This is my only source of income for the next two years due to rule of 55, I get pretty squeamish especially with a war in Russia raging and China threatening to invade Taiwan at the time.

When Fido figured out this was their error (and I'm sorry this is a MAJOR error), they were very apologetic, held a meeting with me and a mega-corp representative, and (probably being wary of a lawsuit) promised they would make good any gains I would have had, and would make good any losses I incur in the interim. I later asked them for details on exactly how this would be calculated and wanted to make sure I had input into it. They would never tell me, they just kept saying they were trying to figure it out. To me that smells of them wanting to fill in these details to their advantage based on what was happening with the market as well as to perhaps try to pick the most opportune time for them to restore the funds.

But regardless of the above, these are the three tenets I think are fair, and cover all the scenarios brought up, as to what they should be on the hook for such a mistake:

1. They must at least use all the money they retrieved from my bank and the IRS to invest in my restored 401K.

2. My account should at least have the same number of shares of each fund that it had on the day it was liquidated. (this would protect my interim gains)

3. On the first day that I am in control of my shares and can trade again, the value of my account should, in effect, be made to be at least the same as the value it was the day it was liquidated. (This is the promised loss protection)

 

[badatmath]

OP, what anyone here thinks doesn't make much difference as most of us are not practicing law in the state you live in and can't really be of help. Perhaps you need a lawyer or a CPA, IDK.

 

[single2019]

OP, what anyone here thinks doesn't make much difference as most of us are not practicing law in the state you live in and can't really be of help. Perhaps you need a lawyer or a CPA, IDK.

Too small an amount to get a lawyer. Pointing out a MAJOR error on social media and working with megacorp & Fidelity is the the right strategy.

I am rooting for OP

 

[pb4uski]

I haven't been moved off my original premise ...

Nor have I... go back to posts #30 and #33. You're pushing a rope and are not going to win, but keep pushing if you want.

 

[ivinsfan]

I haven't been moved off my original premise, and here's some extra food for thought, although I don't think any of this should play into my three tenants listed below for a situation such as this...

In the month previous to this happening I withdrew 300K in cash from the account. You have no idea what I would have done in this 2 week period, and moving more money into the stable fund is certainly not out of the question. This is my only source of income for the next two years due to rule of 55, I get pretty squeamish especially with a war in Russia raging and China threatening to invade Taiwan at the time.

When Fido figured out this was their error (and I'm sorry this is a MAJOR error), they were very apologetic, held a meeting with me and a mega-corp representative, and (probably being wary of a lawsuit) promised they would make good any gains I would have had, and would make good any losses I incur in the interim. I later asked them for details on exactly how this would be calculated and wanted to make sure I had input into it. They would never tell me, they just kept saying they were trying to figure it out. To me that smells of them wanting to fill in these details to their advantage based on what was happening with the market as well as to perhaps try to pick the most opportune time for them to restore the funds.

But regardless of the above, these are the three tenets I think are fair, and cover all the scenarios brought up, as to what they should be on the hook for such a mistake:

1. They must at least use all the money they retrieved from my bank and the IRS to invest in my restored 401K.

2. My account should at least have the same number of shares of each fund that it had on the day it was liquidated. (this would protect my interim gains)

3. On the first day that I am in control of my shares and can trade again, the value of my account should, in effect, be made to be at least the same as the value it was the day it was liquidated. (This is the promised loss protection)

You must not have enough to do....and you are trying to fill out the details to your advantage so what's the difference. From what you say this is a software glitch that made though the vetting process for switching over your companies accounts. I'm sure it's happened before and will happen and that they have a formula for dealing with it. Of course they were sorry , Fido doesn't want this to happen ever, but crap happens.

 

[ivinsfan]

Too small an amount to get a lawyer. Pointing out a MAJOR error on social media and working with megacorp & Fidelity is the the right strategy.

I am rooting for OP

social media has way more things to be bothered about then a software merging error. Have you looked at social media lately

 

[RobbieB]

Yeah, it's not like you caught your wife sleeping with your brother.

 

[badatmath]

Yeah, it's not like you caught your wife sleeping with your brother.

LOL.

 

[cat4ever]

You must not have enough to do....and you are trying to fill out the details to your advantage so what's the difference.

Isn't that part of being retired, having some extra time to post on social media and be a gadfly to mega-corp's ? As for filling the details to my advantage, yes I am which I think I'm entitled to to some degree being it was their mistake, and they handled it very poorly communication-wise. But PB is right, I'm pushing a rope with the odds stacked against me, but it doesn't take that much time and effort so I may as well see where it leads.

Hopefully it's at least presented a semi-interesting discussion for everyone, I don't think I've seen anything similar posted, and my uneducated guess is it's pretty darned rare, so perhaps there is no process that's really been tested for my exact situation.

I have a meeting tomorrow with a Fido rep and mega-corp rep, we'll see what happens.

 

[Texas Proud]

As one TV judge has said, a lawsuit is designed to make you 'whole' and not ching ching let the cash register ring...



You seem to want to make claims that nobody should be able to get..


I could care less that the market went down $5K on one day that you could not trade... there is no evidence that you would have traded... as PB said, unless you sold ALL of your holdings the next day you had not intention of selling...


And as others have pointed out, if that day was a gain you would not be giving Fido that gain as you were going to sell everything but could not..


BTW, I would not have given the $10K... as long as you had all the shares you had when liquidated along with divis you were made whole...

 

[JBTX]

Isn't that part of being retired, having some extra time to post on social media and be a gadfly to mega-corp's ? As for filling the details to my advantage, yes I am which I think I'm entitled to to some degree being it was their mistake, and they handled it very poorly communication-wise. But PB is right, I'm pushing a rope with the odds stacked against me, but it doesn't take that much time and effort so I may as well see where it leads.

Hopefully it's at least presented a semi-interesting discussion for everyone, I don't think I've seen anything similar posted, and my uneducated guess is it's pretty darned rare, so perhaps there is no process that's really been tested for my exact situation.

I have a meeting tomorrow with a Fido rep and mega-corp rep, we'll see what happens.

I’m all for negotiating what you can and being treated fairly in the situation, and in any such situation I will manipulate in my favor, if I can justify it as reasonable. But I don’t think I would push it any further. Ultimately what you are expecting is the best of both worlds, that you would have recovered gains, but would be protected from losses that you likely would have otherwise incurred.

I’d be more inclined to accept that you have been made whole, but point out you’ve had to put a lot of time and effort and stress into this, and would greatly appreciate that this be recognized and should be compensated in some reasonable way. Maybe they respond, maybe they don’t.

 

[pb4uski]

... BTW, I would not have given the $10K... as long as you had all the shares you had when liquidated along with divis you were made whole...

TP, that is an interesting point that I have thought about... and I largely agree with you. If the OP gets the same number of shares back then at first blush that would be being made whole. But at the same time, that would result in Fido receiving $500k from the IRS but only paying $490k for the replacement shares and I don't think that Fido should profit by $10k as a result of their mistake. I realize that there may be other mistakes that Fido loses on and the OPs $10k may offset those.

So to me it is important for Fido to disgorge itself of the $10k of profit. It seemed reasonable for the $10k to go to the OP to compensate the OP for the hassle of this issue. The other option would be for Fido to create a $10k DAF in the OP's name... in that case neither the OP nor Fido benefit from the mistake.

 

[CRLLS]

Just when I thought this thread was over, it now has a 2nd life. Where's my

 

[eytonxav]

It seems like most of responses are missing the point. If I were in that situation, I would expect Fido to give me benefit of the doubt.....if it was a huge amount maybe they make some other concession but the $5k seems reasonable to fix an error that was 100% caused by them for a new client. I'd make some noise at mega-corp and the fact that they did not immediately take ownership is extremely disapointing.

It sounds to me that fault may also lie with mega-corp as they transferred legacy code that erroneously caused this issue.

 

[single2019]

social media has way more things to be bothered about then a software merging error. Have you looked at social media lately

THiS is the social media. OP is doing the right thing. Fidelity screwed up and I hope this gets resolved to OP’s satisfaction.

 

[ivinsfan]

THiS is the social media. OP is doing the right thing. Fidelity screwed up and I hope this gets resolved to OP’s satisfaction.

Oh no, this is a really small fish in a really big pan......small fry....it's a form of social media but sometimes we can't even influence each other let alone Fido....

 

[single2019]

Oh no, this is a really small fish in a really big pan......small fry....it's a form of social media but sometimes we can't even influence each other let alone Fido....

There are a lot of people who read ER and boggle heads. They may not post here, but they get influenced.

Back to my point, besides the perceived or real monetary loss suffered by OP, there was a lot of anxiety+. Fidelity needs to compensate the OP

 

[single2019]

As one TV judge has said, a lawsuit is designed to make you 'whole' and not ching ching let the cash register ring...
...

Don’t know your TV Judge, but punitive damages are awarded for a reason

 

[ivinsfan]

There are a lot of people who read ER and boggle heads. They may not post here, but they get influenced.

Back to my point, besides the perceived or real monetary loss suffered by OP, there was a lot of anxiety+. Fidelity needs to compensate the OP

Well let's see it's a big Corp and Fido...the money never disappeared...it's must have been a hassle but not much danger of losing money...if you're a grownup you realize stuff happens

 

[ivinsfan]

Don’t know your TV Judge, but punitive damages are awarded for a reason

Punitive damages for a software merging error that was corrected no that's not what Punitive damages are for.

 

[single2019]

Well let's see it's a big Corp and Fido...the money never disappeared...it's must have been a hassle but not much danger of losing money...if you're a grownup you realize stuff happens

Interesting. I am 60+ and still growing up. Retired from a MegaCorp that had Fidelity manage all our accounts. Post retirement all tax advantaged accounts have stayed with Fidelity. Fidelity was also my customer. I would be very disappointed if OP’s issue was not resolved to his/her reasonable expectations.

Stuff happens and then one (in this case fidelity) has to fix it.

Stay tuned

 

[Texas Proud]

TP, that is an interesting point that I have thought about... and I largely agree with you. If the OP gets the same number of shares back then at first blush that would be being made whole. But at the same time, that would result in Fido receiving $500k from the IRS but only paying $490k for the replacement shares and I don't think that Fido should profit by $10k as a result of their mistake. I realize that there may be other mistakes that Fido loses on and the OPs $10k may offset those.

So to me it is important for Fido to disgorge itself of the $10k of profit. It seemed reasonable for the $10k to go to the OP to compensate the OP for the hassle of this issue. The other option would be for Fido to create a $10k DAF in the OP's name... in that case neither the OP nor Fido benefit from the mistake.

I get your point... but I am only looking at the OP being made whole... he should not gain by Fidelity's mistake just like he should not lose by it...


Let us say that the OP never saw the error and Fidelity found it and fixed it... putting all the shares back into the account... the OP would look at the statement and see that they have everything that they had before..


As an example I was a corporate trustee and one point in my career... there was a mistake in investing money ($300 million)... so it was invested twice... the one that the customer wanted made $54,000 less than the one I made... the bank kept the $54,000 as it was not what the customer wanted... they were made whole...


In this instance the customer did not want the account liquidated... the account was 'restocked' with all the shares it had prior to the liquidation... the customer was made whole... ie, put back to the position they had PRIOR to the liquidation... the amount of money going in and out is irrelevant to that decision...

 

[Texas Proud]

Don’t know your TV Judge, but punitive damages are awarded for a reason

Not in this case... there would never be punitive damages

 

[single2019]

Not in this case... there would never be punitive damages

I was responding to a post. I never suggested a lawsuit.