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I had a similarly unfavorable experience with AMEX Online Brokerage. A few months ago when stocks were tanking, I was interested in buying DISH (as a short to mid term play.) I had some extra money at the time, and was interested in opening a cash account (at the time I had only IRAs) So I went to AMEX's website and started looking into it. The free trade pitch caught my attention first, then the first of many "ifs", "ands", and "buts" came at me in the fine print, "If you have an account balance over $100,000" hmm, ok. Well, They were still catching my attention on one point: "Trade up to $15,000 immediately, with approved credit" (the account had to be funded in 3 days.. no problem) As a long-time Gold Card Member, I thought at least I would have no problem being approved for credit. So I sat there and went through the VERY extensive application process and yes, I was approved for trading up to $15,000 worth of securities immediately. Great!

So the next morning I got online, and yes, DISH was trading at 38!! I put in my order only to be greeted by a screen which read "We're sorry, but this is an INFREQUENTLY TRADED or EXCESSIVELY VOLATILE security" They further explained that I would be able to invest in such "risky ventures" once my account was funded. I cussed them 10 ways to Sunday and called their 800 number and told the service representative to cancel the account immediately, that I had no further interest in dealing with them. She said she would, but it apparently still exists, since I still get letters from them asking why I never funded the account. I instead opened an account with Datek, and am very happy I did. Not that they are perfect, but at least they seem to know what they are doing, and every time you try to trade, they don't tell you: "Well, we don't approve of this stock so we aren't letting you trade it." Or whatever other excuse there might be.

Oh, of course I was right on the money about DISH. It went up 6 points that morning and was in the 60s within 2 weeks. I could have made 50% there, if the bastards had just let me buy it. At least they never got a hold of my money. I even considered cancelling my credit card with them because of this. I would be glad to tell anyone to steer clear of their brokerage.
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