Type of business Private Products stock brokerage Alexa rank 382,129 (April 2014) Ceased operations 2012 | Industry Financial Services Website www.zecco.com Founded 4 July 2006 Founders Jeroen Veth, Dino van Es | |
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Key people Michael Raneri (CEO)
Michael Feser (President), Zecco Trading Headquarters Burlingame, California, United States | ||
Zecco.com (Zecco Holdings, Inc) was an online investing company that was merged with TradeKing in 2012 to challenge online brokerages such as E*TRADE, Scottrade, TD Ameritrade, Fidelity Investments and Charles Schwab with discounted rates. Investors on Zecco.com have access to Zecco Trading, its stock, option, mutual fund and bond trading platform. Investors also have access to Zecco Forex, which provides spot foreign exchange trading as well as spot gold and spot silver trading. It also operates a financial community, ZeccoShare, where members can share investing ideas and view others' verified trades and performance taken directly from the brokerage.
Contents
Timeline of events
Products
Zecco Trading offers customers:
Regulation
Both Zecco Trading and Zecco Forex are subsidiaries of Zecco Holdings, Inc., but the two are subject to separate regulatory bodies.
Zecco Trading is a registered broker/dealer, member of the Financial Industry Regulatory Authority (FINRA), the primary regulatory body of the securities industry.
Zecco Forex is a separate but affiliated company from Zecco Trading. Zecco Forex is subject to regulation by the National Futures Association.
Criticisms
Initial reviews of Zecco were mixed. Zecco Trading went from concept to live online brokerage in a matter of 8 months, launching with a relatively basic platform and weak customer service. Over the years, Zecco Trading claims to have improved both the product and service.
The data seem to show progress. Barron’s ranked Zecco with 3 stars in 2009 – compared to 2.5 stars in 2008. This ranked them in the same category as Scottrade, ahead of companies like Banc of America Securities and Wellstrade, but behind companies like OptionsXpress and Thinkorswim.
Zecco Trading’s customer service was sometimes criticized in the early days, while Zecco claims to have improved service more recently. Smart Money Magazine's Broker Survey seems to corroborate a turnaround in service quality: Zecco received one star in 2008 for customer service which improved to three stars in 2009.
The low cost was seen as a trade-off for a less polished interface and simpler features than competitors.
Zecco Trading has also undergone criticisms for its accounting methods, which are seen as inaccurately portraying overall account performance, daily balances and trade executions.
Many users expressed frustration after some customers were accidentally given up to $13 million in buying power on April 1, 2009. Zecco Trading explained this as a technical error and said only customers who egregiously abused the extra buying power were held responsible for their trades. However, some customers felt they should have been able to keep gains but not be held responsible for losses.
As a reaction to website downtime at Zecco Trading and many other online brokerages in September 2008, Zecco Trading decided to cancel commissions on all stock trades for all customers during the entire month of October 2008 to compensate investors.
Customers can only trade US markets at Zecco Trading. Zecco currently supports the AMEX, NYSE, NASDAQ, OTCBB, and the Pink Sheets.
Many account functions have fees associated with them, including $50 to transfer stocks to another brokerage (ACAT), $30 per year for IRA accounts, and $235–$575 to request stock certificates.
Despite claiming that commission-free trading would continue indefinitely, Zecco began downgrading and restricting the "free trades" offer as the company grew, and eventually it was eliminated altogether. Beginning January 1, 2008, Zecco instituted a $2,500 minimum balance to qualify for the free trades, and reduced the limit on free trades from 40 per month to 10 per month, claiming that the majority of their customers traded less than 10 times per month anyway. Zecco also raised the price for additional trades from $3.50 to $4.50 per trade. The following year, effective March 1, 2009, Zecco raised the minimum balance for free trades from $2,500 to $25,000, effectively eliminating free trading for many customers. Finally, on February 25, 2011, Zecco announced they would no longer offer free stock trades - despite the origin of its name, zero commission cost. Zecco also raised their prices from $4.50 per trade to $4.95 per trade at that time.
Competitors
Competitors in the discount brokerage industry include: E*TRADE, Scottrade, TD Ameritrade, Fidelity Investments, Charles Schwab, Firstrade, Sharebuilder, and TradeKing.