On-line trading is conducted with a high level of trust in computerized systems and technologies that are often only a few years old.
Problems with online investment transactions:
1) The suitability of the investor for the purchases and/or trading strategies that were effectuated in the account at issue (i.e., customers who are allowed to engage in activities which are grossly in excess of their disclosed financial resources and prior investment experiences);
2) Trades not priced poperly or not properly executed. Trades executed at unreasonably high prices.
3) Computing errors or lack of capacity at the online brokerage. For example, if on an unusually high trading day the investor is unable to make a trade because the online broker's servers are overwhelmed with orders. |
