Zecco.com

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Zecco
Type Private
Founded July 4, 2006
Headquarters San Francisco, California, United States
Key people Michael Raneri, CEO
Michael Feser, President, Zecco Trading
Industry Financial Services
Products stock brokerage
Website www.zecco.com
Alexa rank negative increase 382,129 (April 2014)[1]

Zecco.com (Zecco Holdings, Inc) is an online investing company with operations in San Francisco, California and Glendale, California.[2] Investors on Zecco.com have access to Zecco Trading, its stock, option, mutual fund and bond trading platform.[3][4][5][6] Investors also have access to Zecco Forex, which provides spot foreign exchange trading as well as spot gold and spot silver trading.[7][8] It also operates a financial community, ZeccoShare, where members can share investing ideas and view others' verified trades and performance taken directly from the brokerage.[9][10]

Zecco Trading initially provided customers with commission free stock trades (its name having been derived from zero commission cost).[11] However, since March 2011, Zecco Trading no longer provides customers with free stock trades.[6]

Timeline of events[edit]

  • February 2006: Company founded by Jeroen Veth.[12]
  • July 4, 2006: First offering, a basic online financial community, launched with 8 full-time employees.[13]
  • October 9, 2006: Online brokerage offering Zecco Trading launched
  • January 2007: Expanded staff.[14]
  • February 2007: Addition of IRA account types and addition of 2-legged complex options strategies.[15]
  • May 2007: ZeccoShare community Beta launch
  • November 2007: Launch of 3- and 4-legged complex options strategies and an options analytics suite.[16]
  • January 2008: Hired Michael Feser as President of Zecco Trading.[17]
  • April 2008: Hired Tradeking Chief Compliance Officer Francesco Matteini as CCO.
  • May 2008: Hired ex-Schwab exec Michael Raneri as CIO.[18]
  • July 2008: Addition of analyst reports and online mutual fund trading.[19]
  • July 2008: Launch of online video education offering, the Zecco Zirens.[20]
  • September 2008: Zecco Trading and other brokers experienced downtime at the height of the financial crisis.[21] Zecco Trading offered unlimited free stock trading for all customers in October 2008 as a goodwill gesture.[22]
  • March 2009: Zecco Trading increases the requirements to qualify for free stock trading to $25,000 in assets or 25 trades/month, $4.50 per trade otherwise.[23]
  • March 2009: Launch of bond trading and online chat for customer service.
  • April 2009: Launch of spot foreign exchange market trading through Zecco Forex.
  • April 2009: Company experiences technical glitch that temporarily gives some customers $6–12M in buying power.[24]
  • July 2009: Launch of spot gold and silver trading through the Zecco Forex.
  • July 2009: Over 160,000 opened brokerage accounts and 250,000 community members.
  • January 2010: Michael Raneri takes over as CEO. Former CEO Jeroen Veth joins Board of Directors.
  • February 2011: Zecco announce they no longer offer free stock trades, while increasing their commissions to $4.95 per trade, $6.95 per trade on penny stocks, $0.65 per option contract.[25]
  • May 15, 2012 – TradeKing and Zecco announced they have agreed to merge their businesses. [26]

Products[edit]

Zecco Trading offers customers:

  • Stock, options, mutual fund, and bond trading
  • Real-time positions and balances
  • Quotes, research, and analytics
  • Streaming data and tax reporting

Regulation[edit]

Both Zecco Trading and Zecco Forex are subsidiaries of Zecco Holdings, Inc., but the two are subject to separate regulatory bodies.

Zecco Trading is a registered broker/dealer, member of the Financial Industry Regulatory Authority (FINRA), the primary regulatory body of the securities industry.

Zecco Forex is a separate but affiliated company from Zecco Trading. Zecco Forex is subject to regulation by the National Futures Association.

Criticisms[edit]

Initial reviews of Zecco were mixed. Zecco Trading went from concept to live online brokerage in a matter of 8 months, launching with a relatively basic platform and weak customer service. Over the years, Zecco Trading claims to have improved both the product and service.

The data seem to show progress. Barron’s ranked Zecco with 3 stars[27] in 2009 – compared to 2.5 stars in 2008.[28] This ranked them in the same category as Scottrade, ahead of companies like Banc of America Securities and Wellstrade, but behind companies like OptionsXpress and Thinkorswim.

Zecco Trading’s customer service was sometimes criticized in the early days, while Zecco claims to have improved service[29] more recently. Smart Money Magazine's Broker Survey seems to corroborate a turnaround in service quality: Zecco received one star in 2008 for customer service which improved to three stars in 2009.[30][31]

The low cost was seen as a trade-off for a less polished interface and simpler features than competitors.

Zecco Trading has also undergone criticisms for its accounting methods, which are seen as inaccurately portraying overall account performance, daily balances and trade executions.

Many users expressed frustration after some customers were accidentally given up to $13 million in buying power on April 1, 2009.[32] Zecco Trading explained this as a technical error and said only customers who egregiously abused the extra buying power were held responsible for their trades.[33] However, some customers felt they should have been able to keep gains but not be held responsible for losses.

As a reaction to website downtime at Zecco Trading and many other online brokerages in September 2008, Zecco Trading decided to cancel commissions on all stock trades for all customers during the entire month of October 2008 to compensate investors.[21][22]

Customers can only trade US markets at Zecco Trading. Zecco currently supports the AMEX, NYSE, NASDAQ, OTCBB, and the Pink Sheets.

Many account functions have fees associated with them, including $50 to transfer stocks to another brokerage (ACAT), $30 per year for IRA accounts, and $235–$575 to request stock certificates.[34]

Despite claiming that commission-free trading would continue indefinitely,[35] Zecco began downgrading and restricting the "free trades" offer as the company grew, and eventually it was eliminated altogether. Beginning January 1, 2008, Zecco instituted a $2,500 minimum balance to qualify for the free trades, and reduced the limit on free trades from 40 per month to 10 per month, claiming that the majority of their customers traded less than 10 times per month anyway.[36] Zecco also raised the price for additional trades from $3.50 to $4.50 per trade. The following year, effective March 1, 2009, Zecco raised the minimum balance for free trades from $2,500 to $25,000,[37] effectively eliminating free trading for many customers. Finally, on February 25, 2011, Zecco announced they would no longer offer free stock trades - despite the origin of its name, zero comission cost. Zecco also raised their prices from $4.50 per trade to $4.95 per trade at that time.

April Fools' incident[edit]

On April Fools' Day of 2009, many accounts were showing a multimillion dollar "buying power," Zecco's term for available margin.[32] Several customers purchased securities with the incorrect margin balance, and initially the trades were executed. In some cases, individuals made a large number of trades worth millions of dollars. Here is Zecco Trading's initial response posted on the login page on April 1, 2009:

Some clients may experience incorrect display of Buying Power and Account Balances. Please know that in most cases you may view your correct Start of Day balances under Account Records on the trading platform.

If you need to confirm your Buying Power in order to place a trade, please email Customer Service at customerservice@zeccotrading.com or call 877-700-STOCK (877-700-7862). We thank you for your patience as we work to correct these issues.

Zecco soon began selling the securities purchased with the incorrect buying power, at the investor's expense ($19.99 for a stockbroker-assisted charge).[38] Several customers filed complaints with the SEC. Zecco Trading released a more detailed explanation on April 6, 2009.[39]

Setting The Record Straight For April 1

On April 1, 2009, one of our vendors provided Zecco Trading with an incorrect data feed which caused some customers to see erroneously high buying power. This error was quickly corrected, but about 1% of our customers were impacted. All positions in excess of our customers’ true buying power have since been closed. Except in a very small number of egregious and fraudulent cases, customers will not be responsible for losses (or gains) incurred for trades in excess of their buying power.

Additionally, we want to make it clear that contrary to some reports, this was not in any way intentional and was not an April Fool's joke. We take the integrity of our customers’ accounts very seriously and we have taken measures to ensure this does not happen again. We sincerely apologize to our customers if this caused any confusion.

Industry Awards and Rankings[edit]

Zecco earned three stars and finished thirteenth overall in the StockBrokers.com 2011 Online Broker Review.[40] In 2012, they earned four stars and moved up to eighth place in the annual rankings.[41]

Competitors[edit]

Competitors in the discount brokerage industry include: E*TRADE, Scottrade, TD Ameritrade, Fidelity Investments, Charles Schwab, Firstrade, Sharebuilder, and TradeKing.

See also[edit]

References[edit]

  1. ^ "Zecco.com Site Info". Alexa Internet. Retrieved 2014-04-01. 
  2. ^ Zecco "About Us" Page
  3. ^ System response and access times may vary due to market conditions, system performance, and other factors.
  4. ^ Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options.
  5. ^ Investors should consider the investment objectives, risks, and charges and expenses of a mutual fund or ETF carefully before investing. The prospectus should be read carefully before investing.
  6. ^ a b Zecco pricing and products page
  7. ^ Zecco Forex
  8. ^ Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot gold and silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Before deciding to trade forex, you should carefully consider your financial objectives, level of experience and risk appetite. Other important information.
  9. ^ ZeccoShare Community
  10. ^ Investors share tips, track records online - USATODAY.com
  11. ^ CNBC Coverage of Zecco Launch
  12. ^ Zecco Management Team, Zecco Financial Backers
  13. ^ "ZeccoShare - Stock & Options Trading Community". Zecco.com. Retrieved 2012-07-23. 
  14. ^ "Information and results for 'Zecco.com Enhances Its Leadership Team.' | AccessMyLibrary - Promoting library advocacy". AccessMyLibrary. Retrieved 2012-07-23. 
  15. ^ "Zecco.com Adds IRAs to Free Services - InternetNews". InternetNews. 2007-02-09. Retrieved 2012-07-23. 
  16. ^ "Zecco Launches Major Upgrade to Trading, Options Analytics, Financial Community Platforms". Business Wire. November 26, 2007. 
  17. ^ "Zecco Trading Names Former E*TRADE Executive Michael Feser as President". Reuters. Retrieved 2012-07-23. 
  18. ^ "Zecco Trading Names Former Schwab Executive Michael Raneri as CIO". Reuters. Retrieved 2012-07-23. 
  19. ^ "Investors Observer". Investors Observer. Retrieved 2012-07-23. 
  20. ^ "Investors to Heed the Call of the Zecco Zirens". Bloomberg News. August 25, 2008. 
  21. ^ a b Beyers, Tim (2008-09-23). "Fool Blog: Sympathy for the Retail Trader (AMTD)". Fool.com. Retrieved 2012-07-23. 
  22. ^ a b "ZeccoShare - Stock & Options Trading Community". Zecco.com. Retrieved 2012-07-23. 
  23. ^ "Trade Commission Pricing Details". Zecco. Archived from the original on 2009-09-04. 
  24. ^ Whitehouse, Kaja (2009-04-07). "Online Brokerage Firm Zecco Trading Cleans Up April Fool'S Day Computer Glitch". NYPOST.com. Retrieved 2012-07-23. 
  25. ^ "ZeccoShare Discussions - Important Zecco Trading Message". Zecco.com. Retrieved 2012-07-23. 
  26. ^ "TradeKing and Zecco are Now One Family", May 15, 2012.
  27. ^ "How the 25 Leading Online Brokers Stack Up". S.wsj.net. Retrieved 2013-10-25. 
  28. ^ Carey, Theresa W. (2008-03-17). "Making It Click: Annual Ranking Of the Best Online Brokers - Barrons.com". Online.barrons.com. Retrieved 2012-07-23. 
  29. ^ "ZeccoShare - Stock & Options Trading Community". Zecco.com. Retrieved 2012-07-23. 
  30. ^ By J. Alex Tarquinio (2012-05-16). "SmartMoney's Annual Broker Survey 2012". SmartMoney.com. Retrieved 2012-07-23. 
  31. ^ Byroya Wolversonneil Parmar (2009-05-19). "SmartMoney's 2009 Broker Survey". SmartMoney.com. Retrieved 2012-07-23. 
  32. ^ a b "Zecco Accidentally Increases Some Customers' Buying Power By Millions". The Consumerist. April 5, 2009. 
  33. ^ "ZeccoShare - Stock & Options Trading Community". Zecco.com. Retrieved 2012-07-23. 
  34. ^ "Low cost stock and options commissions - compare with other brokers - Zecco Trading". Zecco.com. Retrieved 2012-07-23. 
  35. ^ "Zecco.com To Offer Free Stock Trading - InternetNews". InternetNews. 2006-10-02. Retrieved 2012-07-23. 
  36. ^ "Zecco downsizes its free services. No more 40 free trades per month. « Democratic Investments by the people for the people". Deminvest.wordpress.com. Retrieved 2012-07-23. 
  37. ^ Find more in Investing (2009-03-01). "Zecco Brokerage Raises Minimum Requirements For Free Trades". My Money Blog. Retrieved 2012-07-23. 
  38. ^ "Congrats, you're a millionaire! April Fools! That'll be $819.99". MetaFilter. Retrieved 2012-07-23. 
  39. ^ "Zecco Trading Notification - Setting The Record Straight For April 1". Zeccopulse. Zecco. April 6, 2009. 
  40. ^ "2011 Online Broker Review", January 18, 2011.
  41. ^ "2012 Online Broker Review", February 21, 2012.