Did not authorize CEF fractional sale?

marko

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Mar 16, 2011
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I recently saw a ~$17 stock sale to my account. It looks like one of my CEFs recorded a fractional sale of .99xx shares. I did not authorize this sale and AFAIK, did not receive any communication of such. I'm not sure if this was initiated by the CEF or by the broker

Is this normal for CEFs? I'm not overly concerned as it's only $17 but I'm wondering what is going on. Anyone with any idea?
 
Is the $17 still in your account or was it removed, perhaps to pay some quarterly fee?
 
It can happen with gold funds because gold produces no income to pay the fund expenses. Any chance your fund invests solely in precious metals? Same thing could happen with crypto, but I don't think there are any crypto CEFs (yet).
 
Is the $17 still in your account or was it removed, perhaps to pay some quarterly fee?
Yes the $17 was sent to my sweep account.
 
It can happen with gold funds because gold produces no income to pay the fund expenses. Any chance your fund invests solely in precious metals? Same thing could happen with crypto, but I don't think there are any crypto CEFs (yet).
No. No precious metals. But as noted, the proceeds were sent to my sweep.
 
The next thing I would wonder about is if the CEF issued some sort of share dividend or share split. When that happens, fractional shares often get generated and then automatically sold for you.

Your broker should know or be able to find out for you.
 
Did it go through a reverse split that created a fractional share? Sometimes you will get cash in lieu of the fraction. CEF as in closed end fund or CEF as in Sprott Physical Gold and Silver Trust?
 
Did it go through a reverse split that created a fractional share? Sometimes you will get cash in lieu of the fraction. CEF as in closed end fund or CEF as in Sprott Physical Gold and Silver Trust?
Closed end fund. Waiting for a reply from the broker.
 
So here's the answer from the broker:

Starting June 28, 2024, fractional shares will no longer be allocated for securities in a dividend reinvestment program (DRIP). Instead, only the value of whole shares will be reinvested, and cash will be issued for any fractional shares based on the last price received from the Depository Trust & Clearing Corporation (DTCC

Thanks to everyone for the replies. Apparently this had to do with a dividend payment.
 
That's news to me. Care to name the brokerage?

Most of our dividends are paid in cash but we have some AT&T and Verizon that DRIP and just paid today. Our brokerage (Fidelity) paid the whole + fractional shares and no cash.

BrianB
 
That's news to me. Care to name the brokerage?

Most of our dividends are paid in cash but we have some AT&T and Verizon that DRIP and just paid today. Our brokerage (Fidelity) paid the whole + fractional shares and no cash.

BrianB
So, I think I have figured it out. When I bought the stock I bought it on a number of dollars not a number of shares. I ended up with xxxx.9932 shares based on the price that day.

The broker, Pershing, has decided that they don't like fractional shares for whatever reason and sold the .9932 shares and deposited the proceeds ($17) to my sweep account.
 
Why do you keep your Pershing account? Etrade or Merrill or Fidelity don't do those stupid things.
 
Why do you keep your Pershing account? Etrade or Merrill or Fidelity don't do those stupid things.
They're the brokerage end of TRowe Price with whom I have the bulk of my investments.
 
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