E*TRADE closed my long-opened checking and brokerage accounts. The reason given was for essentially identity theft. E*TRADE thoroughly identified me when I opened the accounts and many times subsequently. The account closure occurred after I requested a wire to my own account at Dart Bank, another FDIC insured institution.
E*TRADE seems to be using the incorrect reason of identity theft to keep customer funds indefinitely. E*TRADE will not provide me with account statements and I can’t log in to see them. Here is the account closure letter for checking:
And here is the account closure letter for the brokerage:
This is my communication to Morgan Stanley E*TRADE today. I have been requesting the funds be disbursed from my accounts since August of 2025. It is now September and not a phone call, email, text, or any type of real communication from Morgan Stanley E*TRADE.
[address redacted]
[phone number redacted]
email@redacted.com
Date: 9/26/25
To:
Compliance Department
Morgan Stanley E*TRADE
671 N. Glebe Road
Arlington, VA 22203
Re: Demand for Release of Customer Funds – Account Closure Misclassified as Identity Theft
Dear Compliance Department,
I am writing to formally demand the release of funds belonging to me and a third-party remitter that remain in the custody of Morgan Stanley E*TRADE following the closure of my accounts.
On July 7, 2025, a $55,000 cashier’s check was deposited via the E*TRADE mobile application. The check cleared with the issuing bank and was accepted by E*TRADE. At the time of deposit, I also had approximately $5,000–10,000 of my own funds in my accounts.
On August 5–6, 2025, I received letters from E*TRADE stating that my accounts were closed on the basis of “identity theft” and classified as “new accounts.” This characterization is factually incorrect:
- My accounts had been open and in use for many years.
- The “identity theft” claim is unsupported and inconsistent with prior verbal communications from E*TRADE representatives.
As a result, E*TRADE is currently holding between $60,000 and $65,000 in customer funds without providing any lawful basis for retention or disbursement.
My Position
- The funds deposited by cashier’s check were verified by the issuing bank and by E*TRADE before being credited.
- E*TRADE’s closure of my accounts under the guise of “identity theft” is in direct conflict with the actual history of the accounts.
- The refusal to release funds constitutes wrongful conversion and raises potential violations of federal banking laws, securities regulations, and state fiduciary obligations.
Demand
I hereby demand that E*TRADE:
- Immediately release to me all funds belonging to me and restore access to the $5,000–10,000 balance that was mine prior to the deposit; and
- Disburse or return to the remitter (via the issuing bank, if necessary) the $55,000 cashier’s check proceeds that E*TRADE has retained; or
- Provide a written explanation, including specific statutory or regulatory authority, justifying why these funds continue to be withheld.
Absent compliance with this demand within 14 days, I will pursue all available remedies, including:
- Filing arbitration with FINRA;
- Filing formal complaints with the SEC, CFPB, OCC, and FINCEN;
- Referring the matter to the U.S. Secret Service and U.S. Attorney’s Office for review under federal bank fraud and conversion statutes.
I reserve all rights and remedies at law and in equity. Please treat this matter with urgency.
Sincerely,
Scott Emick
Former E*TRADE Account Holder
