I have a question about so called “round trip” transactions. I have done this (by accident) without knowing about this policy. On the company’s website that mages 401K there is no info that I can find about this situation. I got a letter from them saying that I “engaged in excessive exchange activity” although at none of the occasions was anything intentionally. Obviously the amounts were small. Now they decided to “revoke my online trading privileges” for one year!! (not so sure what something I am paying for can be called a privilege. My questions to you:
1 How legal is this and what kind of privileges they have to do it? (including the time).
2. Can I fight this in any way?
3. Even if they can impose this shouldn’t be there a way for me to sell my investments in case of massive losses ONLINE instead of waiting for days
to do this via regular mail?
1 Answer from Attorneys
It is my understanding that mutual fund managers cannot knowingly allow excessive exchange activity to occur on an account. Look at your account policies for an appeal process. The relationship is governed by the terms of the contract. If you don't like it change fund?
Francois M. Nabwangu, Esq.
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