I said some things about OTC gain in this article here,
And it looks like eToro is doing something similar hitting the gym for some (OTC) Gainz, a business model that may or may not be based on issuances of an I.O.U. instead of actually buying the securities.
Hypothetically speaking, You know, you put in money in eToro to buy some shares/equities, and eToro just goes around and ‘credits you for it’ saying you got it, when really you don’t got anything. That sort of thing is the implication that eToro is themselves implying that they do. (evidence down below)
So some user posted this email response;
A user on the GME sub was trying to directly register their shares into their name from their street name, to which, eToro representative said some bullshit;
“Unfortunately, it is not possible to transfer your shares”
That alone was the statement, the rest of the email is a bunch of notes and findings. eToro doesn’t state why it is not possible, nor what recourse, or plan of action there is. So what’s the deal? Does eToro have some back door issues? Do they not have the shares? Is there a hold on this specific security issued by DTC or DTCC? Not much information only that “it is not possible”, and doesn’t even give a time of action or a temporal sense. Such as “it is not possible at this moment” or “today” or “this week”, just a vague temporally indefinite “it is not possible”.
“This means that eToro will purchase them on your behalf and hold them in custody for your under eToro’s account”
No shit sherlock, that’s why this user was trying to directly register those same shares eToro allegedly bought. I mean, it wouldn’t be a problem if you actually bought the shares? It’s the user’s shares right?
So if you have the shares, then just move it to wherever the user wants their shares.
“Although you are trading the value of the underlying real asset, you are not issued a stock issuance certificate and your name is not registered under the share register”
Again, no shit sherlock, that’s why the user is literally trying to take their money/value of THEIR SHARES and directly register it under their name so it’s not in eToro’s name.
That’s the whole point of DRS, is to Directly Register your name onto a certificate away from the DTC.
Like, how dense do you have to be?
Well, wait a minute-
“Although you are trading the value of the underlying real asset”
Hmmm, so you’re saying that users buy shares, but they are only trading the value and NOT the real asset?
Sounds an awful like a contract for difference, is eToro selling a bunch of I.O.Us?
If you haven’t read my OTC Gain article, and don’t see how blatantly criminal eToro’s actions seem to be, then you shouldn’t be reading anything here. Because it’ll probably go over your head.
Here are some other comments by other people;
It’s almost like they never bought your shares.
Here’s another post by another user;
This one is a bit different but is also special; Don’t worry about reading this, I got it up close quoted down below;
“However, although you are trading the underlying real asset you are not issued stock issuance certificates nor are you allocated voting rights”
So, you don’t get the stock, and you don’t have voting rights?
First off, that sounds exactly like a CFD in OTC Gain.
Secondly, if you don’t have any voting rights, then the hundreds of thousands of users who voted in eToro. . . Did their votes not count? WTF?
You’re telly me that the proxy vote for the future of a prospective billion dollar company was tampered with to the degree of excluding all eToro users? All, like, idk, 600,000 of them?
And not only for this specific security, but for all securities that eToro uses? That would imply that ALL VOTES are rigged.
What a democracy, where the brokers take off like the electoral college and vote how they want, rather than on behalf of their constituents that they were supposed to vote on behalf of. Proxy voting, is a scam.
Some users are asking for proof, and it’s not looking good;
So hypothetically, if a shitty broker agent denies your ability to transfer, In some sense, then that brokerage (by virtue of preventing that transfer) also implies that they are in charge of your underlying asset, and as such should be responsible for any damages incurred due to their handling/restrictions-placed of the underlying asset. Because the security is still yours. . . But if they deny the transfer of your assets, then it’s not really ‘yours’. Thus the shitty brokers are no longer being a custodian, and instead doing something much sinister.
What I’m saying is, these canned answers and responses are an invitation for litigation. It’s not looking good for eToro.
Here’s a meme to send you off;
Obviously this shit is blatant that there is misconduct on some degree or level, besides the whole court case proving conspiracy of broker dealers, I wouldn’t be surprised if eToro was also one of those brokers that conspired to halt and damage retail trading during the January 28th run up in the beginning of this year, 2021.
eToro still sucks ass, and that’s my opinion. But definitely, if I were to give advice then I would say;
Stay away from eToro.
But of course;
*Not Valid Financial, Legal, Life, or Any Advice