1. My Life Versus Mrs. Blankfein’s Diamond Earrings

May 25, 2010

by Ellen Brandt, Ph.D.
 
For over twelve years, my financial existence has resembled an ongoing snuff movie enacted for the enjoyment of the nastiest, most malicious group of sociopaths this country has ever known. They’ve finally gone too far, and I can no longer keep silent. If my own financial life can’t be salvaged, at least I want it to stand for something.
 
If the above sounds melodramatic, you will see as this series proceeds that absurdity – commingled with the purest Evil – is the hallmark of what I’ve suffered and continue to suffer moment-by-moment at the hands of my Tormentors.
 
Exactly which Tormentors? I can’t be sure of who the ringleaders are. But I have a good idea who some of them may be, and I intend to name names – or at least affiliations – as this convoluted tale is told.
 
Over the next 30 or 60 or 90 days, I will publish an article in this series nearly every day, ranging widely, as I must, over the events of the past dozen years, with additional commentary on how my story is also your story – unless you’re fortunate enough to be part of the protected one percent or so of Americans and less than 1/100th of one percent of the rest of the world’s citizens who’ve been given the veritable Keys to the Kingdom, allowed to live in unparalleled splendor with unparalleled power and unparalleled license to harass, bully, maim, and sometimes kill the rest of us as they please.
 
What they’ve been pleased to do with me is make it almost impossible for me to survive, let alone thrive, despite the fact that in terms of intelligence, talent, education, and ability, I am the peer of any of them.
 
But twelve years ago, for reasons I’ll relate in future chapters of this narrative, a small group of Masters of the Universe decided that I had to be made an Example of Something-or-Other  – still undetermined. They enlisted others to help them in their noble enterprise, which essentially has been to turn my life into a neverending computer game, in which I am cast as The Enemy, who must be sadistically flailed and flayed at every possible opportunity.
 
Before we go on, a word about the title of this piece, which is arbitrary and generic. I do not know Mr. Blankfein, neither the famous one nor any other, nor do I have any reason to think he is involved in any of the following events.
 
And if there is a Mrs. Blankfein, I’m sure she is a delightful and saintly little woman, who shuns ostentatious display and devotes her spare moments to ladling out soup at homeless shelters or cultivating begonias in her backyard garden.
 
Besides being attention-getting, the title is meant to stand as a metaphor for what the central problem in our country – and our world – and my life – has now become:
 
In a mere three decades or so, pretty much since “supply-side economics” was invented out of thin air, our leaders and our mostly-unwitting population have allowed more and more – and more and more and more and more – of our country’s assets and power and media access and political control to be concentrated in ever fewer and, in many cases, obscenely wealthy hands.
 
Our wholesome, middle class values and ideals – the things that made America the shining beacon for the poor and oppressed of the world – have been forcibly replaced by a firmly entrenched dynamic, supported by a massive unrelenting propaganda campaign, which has established a new Aristocracy of Wealth Alone.
 
Intelligence, talent, innovation, creativity, kindness, moral worth – all have been downgraded as the basis for our meritocracy and replaced by an “ethic” that tells us Rich is Good in the most absolute sense, the ultimate goal towards which we all should strive, even if one has to get there by actions which are cruel, sadistic, immoral, or downright illegal.
 
We’ll talk about these issues in future stories.
 
For now, let me tell you why I am burning with anger against The Insane Ones who have harassed and tormented me for the past decade and why they’ve finally pushed me to tell all – and damn the consequences.
 
Whatever “It” Is, If We Can Get Away With It, It’s OK
 
First, a bit of background for those who don’t know me – and an acknowledgement.
 
Many of the actions and events I’ll tell you about are so outlandish and downright idiotic, your first reaction may be that I am making them up – or that I’m so loony, I should be placed in a rubber room immediately.
 
Well, I’m not loony. I’m painfully sane, which probably makes it harder to cope with the bizarre Through-the-Looking-Glass world my Tormentors have drawn me into against my will.
 
And Yes, many of the forms of harassment my self-styled opponents have chosen are silly and childish and malicious and ridiculous – a perfect illustration of the Banality of Evil theory posited by Hannah Arendt and others.
 
Which, indeed, is another main truth of this narrative: Among those we have placed in positions of great status and power and responsibility are sociopaths and thugs and criminals, with all the finesse and moral acuity of three-year-old tots toting machine guns.
 
Now for some basic background: I’ll tell you how I came to be trading the markets in future chapters. Briefly, I traded successfully enough, in a very modest way, over a ten-year period to preserve a trading account which allowed me to cover my utterly frivolous expenses, like food, insurance, and the electric bill, while keeping the account itself fairly steady.
 
In order to do this, you have to allow some leverage. And like so many others “working” their accounts to cover their costs of living, including a goodly proportion of my fellow Baby Boomers, I did.
 
This strategy worked well for many, many millions of small investors and institutions around the world, including family trusts, nonprofits, and educational and religious endowments, until the Crash of 2008, when outright Predators were given pretty much blanket permission to wipe us out via a series of escalating margin calls.
 
A scenario that’s very similar seems to be playing out now, although I believe at this writing that the slaughter can still be stopped.
 
But to continue with my synopsis: Along with millions of others, my very modest but crucial-to-my-survival trading account of a few hundred thousand dollars was essentially wiped out in 2008.
 
Or so I thought.
 
Let me backtrack a bit, though, to late 2007, about ten months before the Crash, when something that disturbed me greatly began to occur.
 
If you don’t understand Encoding, this may be a bit esoteric. But all Internet sites use some sort of encryption standard for their web pages.  Most US sites use Unicode, which I believe is fairly safe. In late 2007, my broker, TDAmeritrade, abruptly changed its Encoding from Unicode to European ISO, which may sound good, but which I fear allowed some very shady things to occur.
 
The move was close to concurrent with Ameritrade’s allowing various “Partners” to incorporate much more material on their trading sites. I’m not going to single out any of these “Partners” yet – although I will in future stories. Suffice it to say that as soon as the Encoding switch from Unicode to European ISO occurred, I began to suspect strongly – actually more than suspect, to know – that my every move within Ameritrade sites was being keylogged, or spied upon, by someone or other.
 
I say “know,” because I have a certain serious eye condition, which I’ll talk about more in later chapters and which makes me acutely sensitive to the tiny flashes of light one sees upon clicking your mouse or typing your keyboard while you are being keylogged.
 
I will come out and make my first J’Accuse right here: I believe that upon the switchover to a new Encoding system, Ameritrade gave tacit permission to certain of its “Partners” – as well as to its own proprietary trading floor – to keylog any and all of its customers, enabling them to “trade against” customers literally on a tick-by-tick basis in real time.
 
It’s possible that this period marked similar events within other on-line brokerages, although I can’t speak about any others. I do know that I started getting keylogged within my Ameritrade account about this time, and I strongly suspect that everyone else’s account  has been similarly violated.
 
I also noticed that suddenly, one had a great deal of trouble getting among the highest prices on a limit sell or the lowest prices on a limit buy within a given trading sequence – showing that somebody out there was parrying one’s moves, trading tick-by-tick in opposition.
 
Did I call out Ameritrade on this? Yes, of course, I did. And what I was told in response was interesting.
 
I was referred to a nice fellow who said he was the executive assistant to the CEO.  We talked several times. At first, he said he was unaware of the Encoding shift and would research it. In subsequent calls, he acknowledged the shift and intimated  that Yes, it might have something to do with various new “Partners” having a bigger part to play on the trading site. In our last conversation, he expanded further, telling me that, indeed, it was possible that Ameritrade’s own proprietary trading floor might be aware – across the vaunted “Chinese Wall” – of what customers were trading on a real-time basis, adding that “we have to protect ourselves by taking the other side of trades.”
 
Remember that this was almost a year before the Crash.
 
What I was being told, in effect, was that Ameritrade more or less openly admitted to allowing its own traders – and perhaps those trading for its “Partners” – to trade directly against its customers on a real-time basis.
 
Imagine that something similar was going on at every other on-line brokerage in the US and in many other parts of the world.
 
Imagine a protected class of proprietary trading floors and their “Partners” who had a stake in their own customers’ doing poorly. In fact, the more poorly customers did, the better those trading against them might do.
 
Imagine this all being planned well in advance of the Great Crash. And imagine it possibly happening again right now, while the financial services community campaigns rather violently against there being any curbs whatsoever put upon their proprietary trading floors’ Free Lunch.
 
Your Computer is Dead – And So Are You
 
Flash forward. I was so disgusted after the Crash of 2008, I literally did not look at my brokerage statements for a year and a half. For all I knew, there was nothing left at all – and good riddance, if it would get me out from under my malicious Tormentors’ thumbs.
 
It didn’t, as we will discuss later. But at least my life was much less stressful. I considered contacting a securities lawyer and suing Ameritrade over the illegal account keylogging and any role it might have played in the demise of my life’s savings. But I figured so many other millions of people and small institutions were in the exact same boat, it would be better to wait for a class action, if one ever arose.
 
I also sincerely thought that after such a mammoth national tragedy, our leaders would somehow put aside partisan concerns and assure the American people that Cheating, Lying, and Stealing on Wall Street would now become a thing of the past.
 
I spent the next 18 months or so making a (very) small beachhead in the senior services sector and reestablishing my career as a heavy-volume journalist, launching three other blogsites, which I hope you will look at, if you’re not yet familiar with them. They are listed in About, as is an E-mail address and telephone number, if you care to contact me.
 
So all was relatively well until late February, when I decided to reenter the market in a small way. Why just then? Well, I’d started reading up on market events again, and it seemed to me that one of those vaunted “interim bottoms” was upon us.
 
With great trepidation, I decided to look at a brokerage statement for the first time in a year and a half, to see if I had anything left. Amazingly, about a quarter of my original trading account was still there. And with my annual outrageous property tax payment coming up, I thought I’d try to see if I could cover it by some judicious up-from-the-bottom trading.
 
While I’m an utterly horrendous “day trader,” in terms of calculating very short-term moves – is anyone, without insider knowledge, a good one? – I’m an OK “swing trader,” calculating possible moves in the medium term, from one to five weeks out.
 
And since, through a combination of luck and good calculation for a change, I had managed to go back into the market at precisely the right time, I did pretty well, increasing the modest account that was left intact by over 20 percent in about eight weeks.
 
But three weeks ago, the market was clearly going very sour once more, and I decided to “take some profits,” as they say. Reading the disturbing news stories from Asia and Europe, I prepared to sell all but a couple of my holdings the Tuesday morning before the infamous “Flash Crash,” which occurred on a Thursday.
 
All of a sudden, without any warning whatsoever, a few minutes before the market open – and while I was literally within my broker’s site! – my computer system crashed completely. Not a normal, easily fixable, crash, but a crash so total, my entire system was frozen, clearly the effect of a major sudden virus or worm or something similarly catastrophic.
 
I wasted a few hours trying to fix it myself. Then I contacted my computer manufacturer – and its automatically redirected calls to teenagers in India with incomprehensible accents – next Microsoft – more redirects – and finally to the Geek Squad at Best Buy, where I had purchased my computer.
 
To make a long, sad, horrible, disgusting story a bit shorter, I finally, after a total reinstallation of the BIOS, got my computer fixed two days later, the day of the “Flash Crash.”
 
Like everyone else, I had lost fifteen percent of so of my account’s value by that time. But with all the talk about mistakes and investigations, I decided to let things ride.
 
In fact, my account regained all but a thousand dollars or so of its top-level value within the next four or five days, At which point, disturbed once more at the news from and market action in Asia and Europe, I  decided for a second time to “take profits” at the top. And for a second time, on the point of doing so – again from within my brokerage account’s own site – my computer froze and totally crashed once more, this time even more thoroughly and dramatically, so that it was three days before I could go on-line again.
 
We all know what has happened to the market and virtually 100 percent of everyone’s stocks on the second of its two swift mega-dips. At this point, along with everyone else who is not massively short, I may be subject to a 2008-style wipeout again.
 
But I’m not going to take it lying down. Because this time, Dear Readers, the nasty little bleep-bleeps have gone one step too far.
 
Crashing my computer – a fairly new computer with up-to-date protection and software that had never crashed before – not once, but twice, at key market moments from within my brokerage account – is just not remotely acceptable behavior. 
 
I do not for a moment believe this was bad luck or an Internet-wide tsunami or circumstances beyond my brokerage’s control.
 
I believe these two very convenient computer crashes were perpetrated by those “Partners” of the Ameritrade site who’ve been given carte blanche to keylog me and trade against me, in conjunction with the arrogant and malicious little 20-somethings on Ameritrade’s own proprietary trading floor –  whose purpose, as related above, is to “protect themselves” by countering the trades of the firm’s own customers.
 
I don’t make these accusations lightly. As you’ll see in the next article in this series, such computer crashes have occurred with clockwork regularity over the course of a dozen years, albeit never on this new computer system. My nasty little Tormentors, now clearly including some on Ameritrade’s own trading floor, seem to consider hacking and keylogging and sending viruses and worms to crash computers a form of “acceptable trading strategy.”
 
Most of us would not.
 
The next two chapters in this strange and frightening saga will relate the lengths to which some “hacker-traders” will go to hurt those they trade against, seeming to forget that they are fellow human beings.
 
For now, let me just say that the $30,000 or so Ameritrade, instead of me, pocketed in the two “round trips” I missed out on via my computer system being slaughtered would have covered my property taxes for almost four years, my electric bills for six years, insurance payments for twelve years, or various other fluffy and frivolous outlays.
 
But who am I to rob creative hacker-traders of their massive bonuses, spent on essentials like cigars, champagne, and hard-working hookers?
 
What is my life compared to Mrs. Blankfein’s beautiful diamond earrings?
 
For the next two stories in this series, see Blind Woman’s Bluff:
 
and Midnight Death Threats and Kittens With Their Throats Slashed:   

11 Responses to “1. My Life Versus Mrs. Blankfein’s Diamond Earrings”

  1. SmartStops Says:

    Great article Ellen! I’m thankful that I didn’t have to face what you did, but I did face watching hard-earned monies over my career, vanish in this 21st century marketplace we have. In fact, in raising money for our startup – do you know what the VC’s were asking? If you are so smart, why aren’t you working for hedge funds? To which I’m my honest reply was – “someone needs to be working to protect the public” – which to them probably sounded too ‘altruistic’. I told them – it is not just about the wealthy getting wealthier!

    I was saddened when I saw my mother-in-law, at age 72 told to go back to work in 2001 b/c her financial advisor hadn’t done enough to protect her deceased husband’s portfolio in that time frame. And to watch so many others who had their IRA’s , 401ks fully invested in mutual funds lose their hard-earned dollars. I learned so much about WallStreet in getting our startup off the ground. And it truly made me the cynic. There is indeed too much being protected by the few at the top-end . And what’s worse is how they do seem to laugh at our govt. officials.

    I just hope something good can come out of what we’re trying to do. I doubt Washington can really do enough “regulating” to truly disrupt the system. And yet there are all those hard-working americans out there, diligently socking it away in their 401ks, only to watch it get sucked away.

  2. Bill Strouse Says:

    Ellen,

    I generally steer clear of conspiracy-like theories. But I’ve been a student of the pesky and devilish side of politics and business for 40 plus years.

    What you describe is technologically plausible, and it makes sense politically.

    Some may discount your observations and doubt your reasoning, but you are well- known in relatively important circles, and your judgments are respected widely.

    Sic ‘em!

    Bill

  3. Christine Smith Says:

    Wow Ellen!

    I am sure you are not the only one to experience this if your suspicions are correct.

    I hope you are able to get this blog out, gather the masses& move forward in successfully stopping this huge cheating scheme.

    The shame of it all, is that these people are more than likely too big to get punished – they know (pay) all the right people, etc.

    Great blog and I look forward to reading the rest of the series.

    • ellenbrandtphd Says:

      Chris,

      I’d prefer to take a more constructive view and believe it is “rogues” on proprietary trading desks who have perpetrated the worst of the abuses.

      Both big firms and smaller firms have simply turned a blind eye to immoral – and sometimes clearly illegal – behavior by the Boyz on their trading floors.

      Ironically, the firms themselves have the largest stake in doing serious house-cleaning and discovering, firing, and ridding themselves of these “rogues” and making quiet but consistent recompense to those – like me – who have been hurt by game-playing and malice.

      Never has the national opinion of our financial system and its components been so abysmally low.

      It is the financial services sector itself which would benefit most from a thorough moral overhaul and a return to an atmosphere where customers are viewed as partners in markets, rather than sheep to be sheared.

  4. Michael J. Reichert Says:

    Enjoyed this installment and looking forward to more.

  5. Tom Smicklas Says:

    Nice. A very blade-sharp post

    You may want to look into the 2008-ongoing LandAmerica 1031 bankruptcy for a huge cesspool of innocent investor losses (Richmond, VA court).

    IMO, this was the worst scandal of the recent bunch. Real estate investors not only lost almost all their money (the judge placed them as unsecured creditors although they had their funds held in trust), they were taxed on the money they lost (and never received) AND were contracturally obligated to buy properties that were under contract with the money in the 1031 that was bankrupted! A triple whammy.

  6. John Craig Says:

    The same thing happened to me on flash crash day. My Fidelity account went into super slo-mo mode and I couldn’t get any trades done.

    At the time, I attributed it to excessive traffic at Fidelity on the day of the crash. But now you’ve got me in paranoid mode – it certainly could have been something more calculated and malicious than that.

    Great blog, by the way; you’re an excellent writer.

    • ellenbrandtphd Says:

      John,

      The first of my two computer crashes from within the Ameritrade site occurred two days before the so-called Flash Crash, at a time of very low traffic.

      I finally got my computer back up on the day of the Flash Crash itself.

      The second time my computer was crashed from within Ameritrade was about a week after the Flash Crash – again at a time of low traffic. So neither of my crashes had anything to do with the Flash Crash.

  7. Dan Cunningham Says:

    Wow. I resonate with what you say. Ameritrade is my broker and my buys are at or near the top unless I specify a limit, but then the trade may not go at all.

    Clearly, Wall Street is not for investing. It is just a giant casino and stacked in favor of the house. Even when the house gets wiped out it just reloads from the taxpayers.

    Bought-off Congress will never reinstate Glass Steagall, reinstate the uptick rule, regulate derivatives, or ban those proprietary black boxes that get the first look at every incoming order.

    I will follow your journey. Write well and prosper.

  8. Chris Carosa Says:

    Ellen, seriously. You didn’t bite the talking baby bait and start day trading? If so, you now dwell in the netherworld of lost souls.

    Honestly, though, despite the sordid subject matter, I like your writing style.

    • Robert Goldbloom Says:

      Ellen,
      Rather than waiting for the class action suit, have you contacted the SEC or State Attorney General about your suspicions?

      I enjoyed the article and look forward to more.


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