Firstrade Responds to Refocus Group Error

Going private transactions can often result in some complicated bookkeeping for online brokers. As you might recall, on December 5th I made two new purchases for my son’s Coverdell Education Savings Account. One of these purchases was for Refocus Group (RFCS). A few days later, Refocus Group made their reverse split and cash out effective.

Something strange happened in the Firstrade account. The reverse split and cash out was not registered. I think it had to do with the fact that I bought the shares right before the reverse split transaction was effected. I called Firstrade and I also sent them an email indicating my problem.

Here’s the excellent response I received:

Dear George XXXXX:

Thank you for e-mailing Firstrade. Please pardon the delay in our response.
Per our investigation, it is indeed a mandatory re-organization. However,
there is an error in the processing and the last 1,000 shares that you
purchased were not processed. We are currently tracking down these shares
and they will be processed accordingly. Please allow time for processing.

Should you have any additional questions, concerns, or suggestions, please
feel free to contact us.


Firstrade Client Services

I am glad they are investigating this issue and are not ignoring it. I’ll let you know how it gets resolved.

I’m have another going private transaction problem in my BrownCo account, and that response so far has not been very satisfactory. I’ll tell you about it shortly.

7 thoughts on “Firstrade Responds to Refocus Group Error

  • December 21, 2005 at 8:25 pm

    Hi George,

    I had a similar problem with CIBI. I emailed the text from the SEC filing and received an email the next day that they were starting an investigation. Three days later I had the money in my account. My only (minor) complaint outside of the payment not happening automatically was that they never sent an email telling me it was resolved. Then again, the cash in my account was a pretty good indicator. FYI, I use Ameriprise brokerage.

  • December 21, 2005 at 11:40 pm

    Jeremy, thank you for sharing your experience with CIBI.

    By the way, I enjoyed reading your recent article, Finding Opportunities in SOx . I appreciate your mention of Fat Pitch Financials’ list of current going private transactions in that post.

  • January 13, 2006 at 2:40 pm

    I’m currently investing through the discount broker Scottrade but am considering moving to Firstrade because of their wide range of NTF mutual funds. Scottrade’s NTF muutual funds have become very limited, and most transaction incur a fee of $17.00 (and another $17.00 when that stock is sold). I’m trying to get as much info on Firsttrade as I can to help me make that decision. I’m also considering Charles Schwab, but their online information on fees isn’t readily accessible. Your advice would be greatly appreciated.

    Thank you,


  • January 13, 2006 at 10:12 pm

    I have been a Firstrade customer for about three years. I chose them by default: I do not live in the States and after trying several US on-line brokers, found that registering a non-resident client was far too difficult for most. But, Firstrade seemed to have no problem whatsoever and I was quickly registered and up and running.

    I have only had one problem over the three years: I bought a Certificate of Deposit and about one month prior to maturity, Firstrade contacted me to advise that an error had been made by their agent and the purchase had never been processed with the borrower; however, in recompense, the agent would make an ex-gratia payment to me which exceed the interest due on the Certificate if it had been processed.

    All in all, I have found Firstrade to be reliable and their customer service staff always courteous. I would highly recommend them.

    The only caveat is that I have nothing to compare them to — I have never used another US, on-line broker.

  • January 13, 2006 at 11:29 pm

    Bob –

    I think you might find Charles Schwab fees to be rather high. I have heard from a few people that Scottrade has had trouble with some going private transactions. I’m not happy with the management of transactions by BrownCo.

    Firstrade has been responsive to my issues and they have very low overall costs. You can review their fees. I really like the fact they don’t charge me any annual fees for my Roth IRA and Coverdell ESA accounts. (Geez, I really should try to get an affiliate deal with Firstrade given all the positive feedback I give them. )

  • January 14, 2006 at 6:18 pm

    Thanks to all those who answered — it looks like the concensus is Firstrade. I know Firstrade has their forms online, and the process for completing the forms seems straight forward, but does anyone know the time it takes to transfer mutual funds from one broker to another? If, for ecxample, I submit the forms today, when would my funds be available for trading?


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