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Is Zecco A Scam or Legitimate?

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(Updated Sept. 17, 2009) Zecco recently updated their free trades program to have a requirement of a $25,000 balance!

Anytime I hear free I immediately think “scam.” Let’s be honest, the person offering up something for free is looking for some sort of benefit and unless I can find out what the benefit is (especially if I’m giving them all the information they need to steal my identity), I’m going to assume the benefit for them is to steal my identity.

So, is Zecco legitimate or a scam? I let time do the testing because most people are savvy enough to sniff out a scam relatively soon, especially if you let mainstream media do the vetting. Right now, they appear legitimate and that’s because they’re actually a division of Equinox Securities, Inc. According to the NASD Broker Check, Equinox Securities (CRD# 135398, SEC# 8-66916) registered as a corporation in California on 01/21/2005 and is located in Ontario, CA. It’s currently not suspended by any regulator and has not yet had any Arbitration Awards, Disciplinary and/or Regulatory Events. I downloaded the full Equinox Securities report and you can see Zecco Trading listed on page 4.

So, the NASD knows about them but that doesn’t necessarily mean that they’re 100% legit, brokers with fraudulent intentions can register – they just can’t have committed fraud yet. That’s where the second line in their little fine print comes into play, they are a member of SIPC (Securities Investor Protection Corporation), an organization created by Congress in 1970. What do they do?

When a brokerage firm is closed due to bankruptcy or other financial difficulties and customer assets are missing, SIPC steps in as quickly as possible and, within certain limits, works to return customers’ cash, stock and other securities. Without SIPC, investors at financially troubled brokerage firms might lose their securities or money forever or wait for years while their assets are tied up in court.

Now, just because they say they’re in the SIPC doesn’t make it so, but I was able to confirm it through SIPC’s member check. Equinox Securities Inc. located at 2084 E Francis Street, Ontario CA 91761, an address that matches the NASD information. It’s a Cold Fusion script so I couldn’t link directly to the results but they’re in there.

Again, is participation in this program a guarantee it’s not fraudulent? Of course not, but that’s a lot of hoops to jump through if you’re a scam. So, after a brief bit of research, Zecco passed the extensive sniff test for me but to be honest, all the talk of their abysmal customer service makes me think you get what you paid for. Trades are cheap, why not go with a firm that has some credibility in the marketplace? I, for one, am going with TradeKing, twice named Smart Money’s #1 Discount Brokerage of the Year 2006 & 2007 (they removed the discount category after 2007), where trades are only $4.95. Smart Money put Zecco dead last in customer service.

I think customer service in a brokerage is crucial. If I have a problem, I don’t want to wait on hold.

{ 205 comments, please add your thoughts now! }

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205 Responses to “Is Zecco A Scam or Legitimate?”

  1. Brenda says:

    By far, the worst trading company in the USA!

  2. John says:

    Zecco, what a joke!

  3. Michael says:

    I sell options at ZECCO and they have something wrong on their software. I get a margin call every time the options are in the money. I have no margin balance and I sell covered calls only. Seems like as soon as a stock is up then I either have to deposit more money or close my positions. No way to win. Makes no sense.

  4. John says:

    Zecco by far the worse ever! Dead last.

  5. doc says:

    They are a false economy
    In May 6,7 there was a rally in the AM
    Their systems crashed both times and I wished to sell in their rally. I am not a large investor but instead of being up 1500 I was down 1100. It was not due to lack of homework, timing, or emotion. It was simply due to Zecco’s systems

    I called their technical support and I emailed them a message. Now gradually dropping my involvement with Zecco and back to TD Ameritrade. It is double the cost per trade but their tools and systems work.

    May 7th was not a huge trading day!

  6. Willy says:

    Read the fine again carefully this time,take a second look, then inhale deeply. You’ll soon recognize the stench invading your nostrils to be equivalent to sinking in an open sewage pit. Ahhhh!! You’ve just submitted your financial and personal information for identity theft.

  7. Alpha says:

    They´re 100% legit and a better bet than alot of other online brokers .

    • Beta says:

      A brokerage should not be a gamble or bet. The market is for that. the brokerage a tool. I have had an account with Zecco 2 years now and have expeienced all and more of what is wriiten in this blog. I cmplained to the SEC when i finally made some profit and Zecco canceled the sell claiming the SEC ordered the re=buy. The SEC had no answers and refered me back to zecco who hemmed and hawed. didn.t have a satisfying answer to my $2500 loss.
      Zecco as a whole Seems legit but their staff is often suspect, always inadeqate leaving knawin disatisfaction and suspicious discontent. And their ability for even the Ajanitor to fudge the numbers making 1+1= -4,523 is apalling. Their internal secutity sucks,No such thing as a balenced book at zecco,

  8. VERY CONCERNED says:

    SOMETHING STINKS BAD AT ZECCO. DEFINITE FRAUD.
    I have been with zecco for a year and have over a 60k original investment. As written above I have had many problems. Concerning my account Balances and sell /buy orders.
    here is on of big concern.
    On May 12,2009 I had a standing sell order in for UXG. On a company expansion notice the stock soared 25% and my stock sold on opening at 9:30am. Very happy I was as I put in a lower buy order monitoring my account the rest of the afternoon with no worries.
    The next morning all had changed My sell order showed the sale at 9:30am 5-12-09 but then shows a buy at for the same shares at a higher price at the same time. I I did not make this buy order. No notice was sent to me of this change then or since.
    I called Zecco and they said first that the SEC had a recall on all shares selling at this price. At first I said OK but as I checked the records I was worried about what would be considered a wash order by the IRS as well as the erasure of my original buy records from their system. I had my original shares but now show the high buy price If I sell for less I will get audited because of IRS wash laws.
    When I called again I was told that nasdaq(not SEC) called for a cancel order. It was then that I found out how easily these boy brokers can arbitralily change the financial numbers on accounts. Any number. Without any software corrilation to other aspects of the program. They can make anything look like they want. I needed that my sell and their buy erased and my old records restored. The broker instaid change my buy price to my original buy price and made it look like I made 5k on the sell and then repurchased for 80% less then what the stock was going for They don’t need supervisory permission and use very little common sense as to the outcome of their keystrikes. Any one of these boys could think up a plan and rip us off buy aquiring the profits from our sales and fudging the numbers. Scary YES. True. I think so more and more since I contacted the SEC to find out if this “cancel sale” did indeed happen. The SEC did not check and forwarded my complaint to ZECCO.
    Now I watch as the numbers and dates continue to change on past records concerning this exchange I keep record of every instance for the SEC and or the lawsuit against the mickey mouse company.
    Watch yourself whether it’s at the top or a rouge broker 10 free exchanges are not worth the $1000′s in losses it may cost with unsavory brokers.and lax security of your records.
    As of now they have also changed the sell date to the day before and erased record of half the sale. I do have saved copies of all the original Sale.

  9. Bob says:

    funny how you use the word Boys, you must be old.
    Anyways, something must have happened to your stock/company which wasn’t caused by Zecco. In addition, check your “Activity Records” under “Account Records” to see what exactly happened in the account. Lastly, the cost basis can be changed, however, how you want to report to IRS is something else

    • VERY CONCERNED says:

      Thanks for yor suggestions Bob
      No I’m not old but not young or totally inexperienced. I used the term boys to note the seemingly lack of knowledge, experience and ability to answer questions about and/or the ability to repair a problem. I believe the ones I’ve spoken to to be 20′s to early 30′s. With my past brokers at Ameritrade I felt more secure. Maybe I am old.
      I am also well practiced with the Zecco website after a year with them and have checked and double checked then triple checked. I have copied all statements executions, positions and balances as is my habit with this company because of the ocassional rearanging of numbers. Usually balances. Not often, but often enough that I feel the need to have a back check cross reference. My share amounts remained correct but there were other small mistakes that were corrected the next day without the need to call.
      I have had several losses of hundreds to a thousand dollars due to the apparent inadequaces of their program where sell and buy orders were canceled or not accepted at the exact wrong time to cause losses with no satisfactory explination. Just “tough luck have a nice day”.
      I let it ride. But the seriousness and the lack of notice, follow up, and varification this time truly concerns me as the sale was made in the early morning and stood the whole day erasing my standing sell order which was not reinstated causing loss when the stock went up again that day.
      I have original time of happening copies of this particular instance in which the numbers, times and even dates have changed in the later records in such a way it would be impossible to line up actual sell and buy prices with what was actually happening in the market which is well recorded and can not be fudged. 2+2= -5 is not acceptable in kindergarten math much less a brokerage firm.
      In this sense changing the cost basis did not work. Perhaps because it was only half done and made it look like I made twice as much as I would have gotten from a sale that I got nothing for. I had them reinstate the original numbers.
      These copied records will be necessary for next years taxes to try and explain that I did not try to wash this stock. And had nothing to do with the rebuy initiated by Zecco unbeknownced to me. This meeting with the IRS is a gimme Bob unless I sell higher then it reached then. I do not like 7-10 month’s of my life wasted as they put my finances under a microscope and threaten to sieze my accounts until it is cleared up and they kick my ass out of the system.
      I have not been able to get any confirmation of this supposed recall from nasdaq or the SEC. Right now it looks like it could possibly be a scam of some sort.I would love them to provide some type of proof to the contrary. Hopefully the SEC’s letter to them will produce something tangible and I can just put it down to bad business practice due to the lack of notification and follow up with their customers. Not fraudulent practice. And, they will provide a letter of satisfactory explination not only to me but for the IRS should I be audited in the next 7 years.
      Overrought. Making a mountain out of a mole hill. Maybe. Maybe not. You can trip and break an ankle in the mole hole if it isn’t filled in. Yea I’m old. And experienced with loose ends.

  10. BOb says:

    well what did you ask the SEC do?

  11. Gc says:

    Well, I just moved all my securities out for a variety of reasons but in summary:

    1.- bad web site
    2.- bad customer support
    3.- loss of revenue due to delays in orders

    To add to all this, I was not aware of the $50 charge to transfer and close the account. I did not have the cash in the account to pay the 50 dollars and as a result I received a nasty e-mail at 8AM Pacific time saying that if I didn’t have funds to cover my margin account (which was confusing as I didn’t know I had a margin account) they will sell securities if I did not respond by 12 EST. So, I called them and realized they were talking about these $50 dollars for transferring out. Why they simply did not send an e-mail saying: “As a result of your choice to close the account and in accordance to the terms of the agreement, you have insufficient funds to cover the $50 account transfer fee, please call us at your convenience” Instead of doing that, they send an e-mail that says ” As a result of current market conditions, your account requires additional Margin Maintenance. If corrective action is not taken by 12:00 p.m. ET, we may liquidate securities in your account, at your risk, sufficient to bring your account into conformity with our Margin Maintenance requirements. If subject to liquidation, please know the securities will be liquidated “at the market” commencing shortly after the time set forth above (or as soon thereafter as is practicable).”

    They simply suck at customer relations.

    Also, your account is closed completely which means if you have electronic statements you won’t be able to gain access to know cost basis, dates, etc for tax purposes without calling them.

    Once you close you account (I am sure many will continue to do this) make sure you print out your statements withe cost basis and dates otherwise who knows if you will be able to get to the info.

    Overall – BAD experience with Zecco…..

    • Brian says:

      A 50$ dcharge to transfer securities to another brokerage is customary. And your so called “nasty” email probably was straight to the point about being out of compliance with available cash in your account. You see, this is what bugs me. You didn’t even KNOW that brokerages charge for transfers to other accounts, so this leads me to believe you might not know what you should about having an account….

  12. Patty says:

    What a mess! Zecco is a fraud !

    • Brian says:

      How do you know Patty? Any personal experience? You probably don’t even know anything about what GC was talking about. Have you ever even traded a stock?

  13. sheng says:

    very bad expirence with zecco when I try to transfer my fund out and they shut down my trading account right away without any notice but reject my transfer request twice without any reason sending to me. My account was then blocked for couple weeks for no reason! Too crazy! never go with them anymore!

  14. Shawn says:

    I’m using Scottrade and Zecco. Nothing’s wrong with Zecco so far that I’ve notice. Are all these bashers being paid by other online brokerage to bash Zecco?

    Scottrade = good for securities over $1

    reason: any stock under $1 will have an extra .5% fee toward the total order.

    Zecco = good for securities under $1

    reason: $4.50 flat rate trades.

  15. TDmatt says:

    Bashing Zecco? No one’s bashing. They’re telling the truth. And even if it’s a stretch… Zecco’s website is weird, confusing, and it smells so damn fishy. You really want to save money that much?

    Even if it’s not a scam… why not use Ameritrade? They’re nice REAL people. You can call them any time 24/7. They help you with any problem you have. Everything on their website is plain and easy to read and understand. It’s great! Zecco is like myspace! It’s ridiculous!

    Isn’t it worth the money for the better service? Would you rather shop at a store where the people are nice, everything is clean, and the price is regular… or the cheap-o, dirty, nasty, ran-by-weird-people store just to SAVE MONEY?>!?! It’s definitely worth using Ameritrade (or eTrade.) These cheap-o stock brokers just aren’t worth it.

  16. cate says:

    Why do people always assume that just because you pay more for something its better?

    I’ve used both Zecco and Tradeking and I am still with both. I’ve had issues with both, but just because I paid for one trade and not fo another doesn’t mean I got anything like better service for paying. These are discount brokers and I use them because they are low cost not a lot of frills.

  17. [...] Is Zecco a Scam or Legitimate? [...]

  18. zecco srecco says:

    I am calling them for 3 days to investigate some crazy trades in my account. It seems impossible for Zecco to figure out what happened to my 3 orders. They always are nice and promise to call back with info but this is just the stalling.
    I am moving my money to another broker.

    • Greg says:

      This is the problem I had with them. Zecco is like a car that starts and runs fine most mornings. The problem is, a couple times per month it will leave you on the side of the freeway. When Zecco decides to be unreliable, it will cost you major money and you have no recourse with them. It doesn’t matter that the screw up is their fault because their system burped. Your loss. Despite the fact that Zecco’s platform works most of the time, I don’t trust it and therefore I no longer depend on it.

  19. Leon says:

    Zecco.com doesn’t charge fees for penny stock trades, Tradeking(which I used earlier in the year) charged you 1 extra buck for a penny stock buy + 1 cent for each stock purchased!

    My brother spent over a $1000 in fees alone! We’re both much happier on Zecco.com now

  20. Anthony McHugh says:

    I’ve used Zecco for three years and have to say I am satified. I was very excited at their initial offer to trade for free. When they went to the $25K limit, it was disappointing but I understand the move was Zecco afloat. There are some ocassional software glitches and waiting periods but on the whole I find their customer service to be responsive and their trading platform easy and sound. I would recommend Zecco. I would also try and reassure those who fear a scam that the company is a legitimate broker.

  21. Chris says:

    I have had an account with Zecco for over 1 year and can honestly say I’ve been very happy with them. My transactions (and I’ve made many) have been executed extremely quickly and always without any hitches. I love the fact too that you can make transactions for free (or just $4.50 whilst you’re building up to the $25K.)

    A sad fact is that the majority of people are lazy and will only post a review when they are dissatisfied, which naturally paints an unfair picture. Like I said, as far as their user-interface, speed of transactions and (especially) cost-structure are concerned, I’ve been thoroughly satisfied.

    I’ve even found their customer support to be friendly and supportive. Based on my good experience I recommended my brother to join, but unfortunately he didn’t state me as a referal and I therefore didn’t receive the $75 offer. However when I explained the situation they investigated and said they would make an exception and gave me the $75!! Excellent customer service in my opinion!!

  22. Pam says:

    We’ve been using Zecco over a year and no problems on our accounts. I had a question about a transaction I wanted to do and called just yesterday. I got a live person quickly who was pleasant and got my questions answered promptly.

  23. Bo says:

    Love Zecco!!! There great for my needs and i have had no problems over a year now. I too have called with questions and they always returned my call promptly and answered all my questions. You get what you pay for and i am happy with what i am getting for what i am paying!

  24. Frank says:

    I’ve been using Zecco for a while now. I haven’t had any problems with them at all. As a matter of fact very pleased with the money I’m saving per trade.

  25. PeteC says:

    I’m looking for another broker. I currently trade between 300 and 2,000 options daily (buy then sell). I have two accounts, TDAmeritrade and ETrade. I need an alternative for ETrade because their executions are too slow. When I enter market orders, I click “enter” on both, a split second apart. The TD status shows “Executed” in seconds or maybe, for large orders (>1,000 options), in three or four mouse click updates. ETrade always takes longer, sometimes over a minute.

    Since I typically buy in a rising prices and sell in a declining prices, I get better execution prices on TD.

    I should move the ETrade account to TD but I already have three accounts there. If something goes wrong, like TD goes belly up, I could be SOL until the SIPC settles.

    So, based on how I trade, any recommendations on a broker?

    TIA,

    Pete


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