Is any of our readers an expert on banking laws and customs? The reason I ask is that recently, EverBank World Markets, after agreeing to renew a CD denominated in Icelandic Krona, suddenly closed it, purportedly because the "currency stopped trading."
The bank then "converted" my CD from Icelandic Krona into dollars at an eye-popping rate of 171.98 per dollar on October 6, cutting the value of my CD from $5691.11 to $3744.68 -- a loss of two thousand dollars -- by assigning the krona an extraordinarily low value.
What is extremely odd about this is that the exchange rate that EverBank recorded -- 171.98 per dollar -- is strikingly different from the rate of 112 Krona per dollar cited on EverBank's own web site yesterday, and the rates cited by other financial information sources, like exchange-rates.org. (Even those rates were themselves a huge drop for the Krona, which traded at around 60 per dollar at the beginning of 2008). The net result of EverBank's using this bizarre currency exchange rate was to reduce the value of my CD by nearly $2,000. Icelandic currency traded at much higher rates on October 6 than the rate that Everbank used.
The rate EverBank used also finds no support at Bloomberg, the nation's leading source of financial information, which shows the Icelandic Krona ranging from 96.68 per dollar to 128.17 per dollar in the period of October 3 through October 7.
Can any of our readers explain why EverBank did this? And what remedies may exist under banking or contract law for what it did?
ADDENDUM, NOVEMBER 11: To all the folks who have emailed me about this: I apologize for this, but I am so busy now that I can't respond to all your emails. I believe that one avenue for you to pursue is to file a complaint with the Office of Thrift Supervision. Another option would be to file a class action lawsuit in court. I received an email a long time ago from an attorney, Mike Millen of 119 Calle Marguerita #100, Los Gatos, California 95032, expressing interest in learning more about this situation (MikeMillen-at-aol.com). Mr. Millen might be able to provide you with some advice or assistance if you write to him.
SECOND ADDENDUM, DECEMBER 12: Attorney Mike Millen asks if anyone who suffered at the hands of EverBank lives in California. Please let me him, or me, know if you are. You can reach him at MikeMillen-at-aol.com, or me at hbader-at-cei.org. Thanks.