Advertisement
  1. Business

Clients of Tampa firm that lost all of their money in 'catastrophic' trades seek $9.5 million

A major brokerage is being sued for trades it handled for Tampa's OptionSellers.com, whose nearly 300 clients included Tampa Bay Lightning owner Jeff Vinik.
James Cordier, the founder of OptionSellers.com, apologized in an emotional video to clients that losses from bad bets on energy prices would likely lead to the demise of his firm.
Published Jan. 15

The first of what could be many lawsuits has been filed in connection with an options trading fiasco in which a Tampa company lost at least $150 million of its clients' money.

Attorney Jason Albin is suing the brokerage firm INTL FCStone on behalf of 10 Florida families, alleging that it failed to have adequate procedures in place to detect and protect against the kind of losses incurred.

FCStone, a public company with almost $30 billion in revenues last year, handled trades that James Cordier of Tampa-based OptionSellers.com made for nearly 300 investors including Tampa Bay Lighting owner Jeff Vinik. In a bizarre video posted on YouTube on Nov. 16, Cordier apologized to clients for losing their money in what he called an "incredibly devastating'' turn of events.

READ MORE: Tampa Bay Lightning owner Jeff Vinik among clients who lost money in collapse of Tampa-based investment fund.

According to the complaint filed Friday, Cordier — who wrote a popular book on options and has been quoted in the Wall Street Journal and other news media — recruited investors to open accounts at FCStone by promising "high returns and fastidious risk management.'' Instead, the complaint says, the brokerage ignored risks in order to appease Cordier's company, which was generating large commissions for FCStone.

During the week of Nov. 12, FCStone "turned a blind eye as its account holders' assets became increasingly concentrated in highly volatile natural gas and crude oil options positions,'' the complaint says. "OptionSellers.com was betting prices would remain stable or that natural gas prices would drop and crude oil prices would rise. If they had, OptionSellers.com would have made a small profit on the options contracts.''

On Nov. 14, however, natural gas prices spiked and crude oil prices dropped, causing losses to investors that exceeded the amounts in their brokerage accounts. "FCStone was allowing OptionSellers.com to take extraordinary risks for a very small return,'' the complaint says.

On Nov. 15, Corider notified clients of their losses in an email title "Catastrophic Loss Event.'' On the same day, FCStone emailed clients that their margin debt payments — money borrowed from the brokerage to make trades — were due by the end of the day.

Albin has not identified the clients he represents but said a 79-year-old investor in Fort Myers lost $1.8 million and owes FCStone $571,000. Another investor, from the Tampa area, lost $450,000 and owes $125,000,

"None of the investors realized they could wake up one day to discover that they had not only lost all the money in their accounts but also owe money to FCStone,'' Albin said. "The saddest part about this whole mess is that it could have been avoided if FCStone had just done its job.''

The families are seeking $9.5 million from FCStone since Cordier's company apparently has no assets. He has not returned calls for comment, and FCStone did not return a call or email.

Albin, a partner in the Ohio law ChapmanAlbin, filed his complaint with the Financial Industry Regulatory Authority, a non-government, not-for-profit organization authorized by Congress to protect investors by writing and enforcing rules governing the activities of broker-dealers. Several other law firms are also offering to help OptionsSellers clients recoup their money.

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

ALSO IN THIS SECTION

  1. Tampa Bay Lighting host a watch party on the beach at the Tradewinds resort on St. Pete Beach in February. LUIS SANTANA  |  Tampa Bay Times
    TradeWinds is the biggest resort in Pinellas County.
  2. A view of the downtown St. Petersburg skyline and waterfront from over Tampa Bay.
    The news that the Tampa Hillsborough Economic Development Corporation wants to change its name to include “Tampa Bay” has been met with resistance.
  3. The Whole Coffee Company makes Dunkin’-branded Coffee Thins as well as Tim Hortons Double Double bars and its own Whole Coffee Company-branded nudge coffee bars. (Photo courtesy The Whole Coffee Company) The Whole Coffee Company
    The Whole Coffee Company, which is based in Miami, was previously known as Tierra Nueva Fine Cocoa. ProspEquity Partners of Tampa owns a majority stake in Whole Coffee.
  4. The Corona Cove opens as the Florida Aquarium's new outdoor bar. The beer company is pledging continued donations to aid conservation efforts. Florida Aquarium
    The beer company also has pledged donations to aid conservation efforts.
  5. The Triton cantaloupe, created with help from Eckerd College. Eckerd College
    The St. Petersburg college teamed up with a central Florida plant breeder to create the Triton cantaloupe.
  6. FILE - In this May 14, 2019, fiel photo, containers are piled up at a port in Qingdao in east China's Shandong province. China’s economic growth slowed to a 26-year low in the latest quarter as a tariff war with Washington weighed on exports and auto sales and other domestic activity weakened. The world’s second-largest economy expanded by 6.2 percent in the three months ending in September, down from the previous quarter’s 6 percent, data showed Friday, Oct. 18, 2019. AP
    Growth in the world’s second-largest economy slipped to 6% in the three months ending in September, down from the previous quarter’s 6.2%, data showed Friday.
  7. Ryan Cummings, 23, left, and Alex Frey, 25, both of Tampa, rent Spin electric scooters from a corral located along Zack Street in May. St. Petersburg hopes to soon launch it's own scooter program. CHRIS URSO  |  Tampa Bay Times
    The city wants to avoid other cities’ mistakes. Scooters will not be allowed on sidewalks and must be parked in designated corrals.
  8. Sam's Club fulfillment center manager Nick Barbieri explains to a shopper how the new Scan & Go shop works at 5135 S Dale Mabry Highway. SARA DINATALE  |  Tampa Bay Times
    The shuttered store has been reinvented and debuted to the community.
  9. Yogi Goswami
    The Molekule Air Mini is a scaled-down version of its original purifier.
  10. 580 Corporate Center in Oldsmar Jones Lang LaSalle Capital Markets
    The six-building center is 91 percent occupied.
Advertisement
Advertisement
Advertisement