MENLO PARK, Calif. - The National Association of Securities Dealers has ordered E-Trade Securities Inc. to pay an online investor $61,203 for executing a limit order that the investor had canceled, costing him $53,000.
The ruling, announced Monday, came after more than a year of litigation. E-Trade's counterclaim against the investor, Ali Lee Khadivi, seeking repayment of a debit balance was dismissed.
The litigation stemmed from a February 1999 outage that disabled E-Trade's online trading system. Before the outage Mr. Khadivi had cancelled a stock purchase, but E-Trade alleged to have never received this request and the purchase was never cancelled.
According to Ryan Bakhtiari, one of Mr. Khadivi's attorneys and a partner with the Beverly Hills firm of Aidikoff & Uhl, "E-Trade tried to blame Mr. Khadivi after they wiped him out, sent his account to a collection agency, and tried to conceal their wrongdoing."