Consumer complaint received 2026-03-13 00:00:00
Product: Checking or savings account — CD (Certificate of Deposit)
Issue: Managing an account — Deposits or withdrawals
Company: MORGAN STANLEY & CO. LLC
State: CA

Complaint narrative:
* * Formal Complaint Regarding E * TRADE Account Restriction, Customer Treatment, and Possible Retaliatory Conduct * * To Whom It May Concern, I am submitting this complaint regarding the conduct of E * TRADE from Morgan Stanley in connection with the handling of funds deposited into my account and the subsequent treatment I received as a customer. My wife and I recently liquidated her 401 ( k ), and the proceeds were wired directly from XXXX into our E * TRADE account. The wire transfer cleared in approximately 24 hours. For roughly a week following the deposit, the funds were fully available and the account functioned normally. Without any notice or warning, E * TRADE then placed a security hold on our account. We were not informed in advance or even notified afterward. We only discovered the restriction when a payment was declined while attempting to make a purchase in a retail store, which was both unexpected and embarrassing. When we contacted E * TRADE customer service, we were told the hold was being placed in order to verify the source of the XXXX funds. This explanation raised immediate concerns because : The wire had already cleared. The funds had been available and usable for approximately one week. E * TRADE has direct institutional banking channels through which such verifications can be conducted without requiring customer involvement. Despite this, we were repeatedly asked to provide documentation to verify the funds. Over the course of approximately 30 days, we submitted every document requested. However, E * TRADE did not request all necessary documents at once. Instead, the process became a repeating cycle where we would submit documents, be told that everything was complete and under review, and then several days later be asked to provide additional documentation. Each review period was quoted as taking 34 days, yet responses routinely took 67 days or more. This pattern continued for weeks. By the end of this process, we had provided all possible documentation demonstrating the legitimacy of the wire transfer from XXXX. There were no further documents that could reasonably be produced. Despite this, the account restriction remained in place and we were given no clear timeline for resolution. Additionally, during several calls with E * TRADE representatives, the customer service we received was unprofessional and hostile. We were treated with suspicion rather than assistance, and one representative went so far as to accuse us of being dishonest. After approximately 30 days with no resolution and no clear path forward, I filed a complaint with the Consumer Financial Protection Bureau. Shortly afterward, when I contacted E * TRADE again, I was told that the account would be closed and that I should wire my funds out. No meaningful explanation was provided. Given the timing, this raised serious concerns that the account closure may have been retaliatory following the CFPB complaint. I am requesting that the appropriate regulatory body review the following issues : The legitimacy and handling of the security hold placed on the account The prolonged documentation cycle and delays in review The conduct of E * TRADE customer service representatives The circumstances surrounding the account closure following the CFPB complaint Whether these actions comply with applicable consumer protection and financial service regulations I am prepared to provide supporting documentation including account records, correspondence, and call details if requested. Thank you for your attention to this matter. Sincerely, XXXX XXXX eTRADE ACCT NO : XXXX

Company response to consumer: Closed with explanation