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Ally Invest, other brokerages face disruptions amid 'unprecedented' trading volume

A number of major brokerages reported technical difficulties this week, days after high volume paralyzed the trading platforms in the midst of a WallStreetBets-fueled frenzy.

Elevated interest in stock market bets, combined with turnover from unhappy customers switching platforms, triggered service problems at Ally Invest (ALLY) and brief outages at other brokerages like TD Ameritrade and Fidelity.

The issues raise questions about the technical capacity of the large brokerages to handle the surge in trading interest, as meme stocks like GameStop (GME) and AMC Entertainment (AMC) draw interest from brand new investors at unseen volumes.

Volume last Wednesday reached record levels, as investors traded more than 23.6 billion shares of U.S.-listed companies, according to Bloomberg data. Activity on Monday was comparably lower at 15.9 billion shares, but still elevated compared to normal trading levels over the past few months.

‘I am pulling all my money’

At Ally Invest, users reported issues logging into accounts over the weekend, and those able to successfully get through saw massive discrepancies in their account balances.

Fowana Terry lives in San Francisco and noticed on Saturday that her Ally Invest account was showing the wrong balance, reflecting old stock holdings from 2017. The issue was not corrected until Tuesday night.

Terry, who was not trying to invest in the high-volatility tickers, told Yahoo Finance that the error was preventing her from making investments in even other stocks. Her calls over the weekend were met with assurances from Ally that they were working on it.

“That’s a piece of s*** excuse especially when it’s dealing with people’s finances,” Terry said.

Ally Invest told Yahoo Finance Tuesday afternoon that the platform is still experiencing some problems for a “shrinking number of customers” amid “huge spikes” in account openings, concurrent users, and transactions.

“Extraordinary market volatility coupled with unprecedented volume challenged our platforms this past week, leading to login issues and other system anomalies,” said Ally Invest spokesperson Rebecca Anderson.

In the meantime, the brokerage is offering broker-assisted trades over the phone and is working on upgrading their systems.

That may have been too little, too late for Aaron Morris in Kansas, who exercised a call option on Friday to buy 100 shares Gamestop at $95 each. But the stock was not showing up in his Ally Invest account through the weekend and into Monday, when he had hoped to trade the shares.

After a four and a half hour wait on Tuesday, Morris was able to reach Ally over the phone and sold the shares in a market order at $85 each, taking a loss as GameStop tumbled 60% on Tuesday.

For comparison, shares of GameStop were trading as high as $322 on Monday.

“As soon as this settles I am pulling all of my money from Ally,” Morris told Yahoo Finance. Screenshots provided to Yahoo Finance confirmed that the site was still incorrectly listing Morris’s holdings as of Wednesday morning.

Issues at other brokerages

Other brokerages also suffered performance issues on Monday, as customers took to Twitter, DownDetector.com, and Reddit to flag problems.

A spokesperson for Fidelity told Yahoo Finance that the platform was continuing to experience high levels of activity but quickly addressed “intermittent issues” that cropped up at the market open on Monday.

A TD Ameritrade spokesperson also confirmed that its platforms had experienced some “slowness at login” due to high volume on Monday, but said the company had resolved the issue “within minutes.” The issues are not tied with Schwab (SCHW), which remains a separate broker-dealer as the companies integrate systems following last year’s completed merger.

Users on E-Trade, a subsidiary of Morgan Stanley (MS), also flagged issues with being able to place trades. The company did not respond to a Yahoo Finance request for comment.

The outages experienced this week do not appear to be related to restrictions last week imposed by the clearinghouses that help brokerages facilitate trades made by their users.

Last Thursday, Apex Clearing Corporation halted transactions of GameStop, AMC, and Koss (KOSS), sidelining investors for about four hours on brokerage platforms that use the clearing firm (such as Ally Invest, Webull and SoFi).

Ally Invest said Tuesday that transactions for the three stocks were open on its platform.

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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