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SDS (Seductive Dividend Stocks)
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Sorry I hide my true identity but I'm a physicist/engineer, native contrarian and idea generator. I am an eclectic dividend investor with motto "In God We Trust, All Others Pay Cash" applied to companies I invest in. I like to read /and read a lot - did you look on my SA photo 8-)? /... More
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  • JP Morgan / Scottrade/ And Teléfonos De México (TMX) ADR - A Crime Case? 2 comments
    Mar 23, 2012 5:24 PM
    JP Morgan / Scottrade/ And Teléfonos De México (TMX) ADR - A Crime Case?

    Teléfonos de México decided to stop trade their shares TMX in USA and ADR shareholders supposed to receive cash on 1 March 2012. Scottrade informed that a transfer agent should distribute proceeds less a $20 cable fee and $5 per 100 ADRs. Although these charges are questionable I can accept them.

    But surprise, surprise .... money did not came into my Scottrade account as 3/22/2012. So I call Scottrade and they INCORRECTLY told me that Canadian Stock Transfer Company (formerly CIBC Mellon) is the transfer agent. Canadian Stock Transfer Company refers me to JP Morgan. JP Morgan is indeed transfer agent for Teléfonos de México (TMX) ADR.

    By unknown reasons JP Morgan decided not transfer money in time to TMX shereholder and held them.
    Well, I spoke with JP Morgan rep today 3/23/2012. She promissed that money will be send to brokers 3/23 or 3/26/2012.

    Isn't it a crime that JP Morgan used TMX shareholders money for about 1 month?

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  • If your stocks are held in street name, which I am 99% sure they are if you are with Scottrade, in theory Scottrade "owes" you the stock and therefore "owes" you the dividend. It should be their problem, unless they transferred the shares back into your name on delisting then it is your problem.

     

    I think it is reasonable for a broker to return stocks to you that do not fit the criteria of stocks they can hold.

     

    But I'm sure they have some fine print saying they don't owe it to you if they didn't receive the funds, period. Which is kind of unfair. Good luck going after any broker for anything from personal experience, they all hide behind this nice little fortress called NASD arbitration. HOWEVER.... I heard that in CA you can try filing small claims and the judge may wave arbitration entirely and force them to appear in your location, in which case your check will magically appear from Scottrade I assure you before your date. There is some precedent on an airline ticket case, I think it was Southwest or American try google it. It's $40 filing fee - go for it!
    28 Apr 2012, 09:19 PM Reply Like
  • Author’s reply » Yes all are held in street name and I didn't read any fine print
    I (and hopefully all others) received money 3/24/12. Because each stock is ~ 1% of my portfolio, amount wasn't big enough to spend time for court. It is just good lesson about some nasty ADR features and some financial institutes.
    28 Apr 2012, 09:27 PM Reply Like
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