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Island Exchange (NASDAQ) Down 09/29/2008


Hope someone here been through this and can provide some advice.

A strange thing happened to my DGP sell limit order @ 21.74 with my online broker on 09/29/2008. In short, I noticed DGP passed 21.74 and my order did not trigger. After numerous phone calls and waiting my online broker told me that the order was sent to Island Exchange earlier in the day and that Island Exchange went down so my order and others did not get filled, so it was eventually cancelled. So, basically there position is 'tough luck'.

Had they tried to contact me via phone or email I would've known what was going on and try to lock in my gain somehow ($7K). Unfortunately I got through only after the market closed and discovered the mess. Not only did I lost the gain, but I lost the opportunity to buy it again at a better price/setup.

I called NASDAQ and they only confirmed the downage and told me specifically "if you're not happy with your broker you can always switch".

I spoke to another online broker which I have an account with, Fidelity, and described what happened. They told me that my limit order of 21.74 was on bid in the Primary Market and that the Market Marker should've honor that trade. Fidelity said if they route my order and somehow there was a techincal difficult they would honor it.

So, I wrote a letter to the Compliance Officer explaining the situation and asked that they honor my gain/lost and mentioned about the Primary Market etc. Their tone changed and that they told me they'll reach a ruling in 3-5 business day.

As a trader do we have any recourse if they messed up the trade? Especially the web site tout their horns about superior routing, AutoRecovery, etc and all mumbo jumbo.

If they don't know my gain/lost the only thing I can do file an official grievance with the online broker and SEC, I guess.

Any comments?

Thanks all.