E*Trade users locked out of trading

E*Trade's trading capabilities were inaccessible to some account holders for several hours today, and at market close at least 5 percent of its customers were still unable to buy or sell stock online.

The outage was "embarrassing" for E*Trade, said Leonard Purkis, the company's executive vice president of finance, who spoke at the NationsBanc Montgomery Securities conference in San Francisco today.

The glitch, which occurred shortly after the market opened, was caused by a software upgrade that malfunctioned.

"We've made some changes," said spokesman Russell Simon. "The problem is not fully solved."

The glitch was not related to trading volume or E*Trade's system capacity, which have caused problems in the past, the company said.

Other parts of the site, such as portfolio tracking and stock quotes, were unaffected by the trading glitch, E*Trade said, but its voice-recognition trading system was down for about 50 minutes.

But one E*Trade account holder told CNET News.com that his portfolio manager screen showed nothing where his stocks should be listed, although the account positions screen did show his actual holdings.

E*Trade users who contacted CNET News.com said they received only this message when attempting to log into their accounts: "Your request cannot be completed. Please try again or contact E*TRADE Customer Service at [e-mail]. Thank You."

The brokerage has set up a special email address, [e-mail], to handle customer complaints, which have also been rampant on message boards throughout the Web. "We sincerely apologize to our customers for any inconvenience," the company's statement read.

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This is not the first time technical problems have hampered trading on E*Trade's site. In 1997, some investors sued E*Trade after experiencing trading delays during major market swings in October of that year. But today's glitch comes just one week after Securities and Exchange Commission chairman Arthur Levitt cautioned investors about the perils of online trading.

The SEC said that it expects 10 million individual investors to be buying and selling stocks online by the end of this year, but complaints to the SEC about Web brokerages are up 330 percent.

E*Trade management is scheduled to make a presentation to institutional investors at the Nationsbanc Montgomery Securities conference later today.

[baldwinl]

Arrrgh! I have been locked out for over a week. I am trying to get at cash that is sitting there to buy a house. I hate you E-trade! I am going to Wells Fargo online trading. At least I will be able to walk into my local branch and appeal to a person! But first, I have to get to my damn account!

My experience with E*Trade has been disappointing. They do not respond to legitimate reports of bugs in their system. They dismiss suggestions for improvement. Their net transaction amounts are often erroneous. Their downloadable CSV files of trade history are erroneous, sometimes reporting "Buy" when the trade was actually "Buy to Cover". There are also other errors with their CSV files, which I have reported to them, but they do not appear at all interested in fixing the problems. Hello, E*Trade, are you listening?

Because their CSV files of trade history are unreliable, one cannot import into Schedule D software products such as Track Your Trades. E*Trade needs to re-engineer their CSV files so they can be imported.

In my opinion, E*Trade has several deficiencies to correct before they can be considered to be among the best online brokers. Right now, they are among the worst. Fix the bugs, E*Trade, so you can better serve your customers and be proud of your product.