Published in the Home News Tribune 12/29/00 By PETER EICHENBAUM GANNETT NEW JERSEY MANALAPAN: There are only a few things that infants do well. High-risk stock trading isn't one of them.

But 6-month-old Shayna Glanzer made 15 securities transactions on margin in three days, or so it said when her parents, who live on Pease Road, opened the latest statement from their daughter's TD Waterhouse custodial account.

As it turns out, "human error" at the securities firm crossed up Shayna's account with that of another customer, temporarily putting her college fund in jeopardy.

Jeff McKay, the girl's father, said he spoke to three people at TD Waterhouse, and "all three told me the same thing: This is impossible."

Trading on margin paying a small percentage of transaction costs and borrowing the remainder from a brokerage firm is not permitted for custodial accounts.

Shayna "understands when it's feeding time" and "she understands oatmeal," McKay said. "But margin calls are very alien terrain to her."

Melissa Gitter, a Waterhouse spokeswoman in New York, said the mix-up began when a customer lost his wallet and was given a new account number that differed by one digit from Shayna's.

The information for the man's account was entered manually, and one digit was mistyped. So the unidentified customer got the same number as Shayna's.

The error allowed the customer to trade on margin, as he was permitted to do, but pulled the cash to pay for the trades from Shayna's account.

"This customer was assigned her account number, and everything started going to her account," Gitter said.

McKay, who reports for Shadow Traffic on several metropolitan area radio stations, discovered the error on Tuesday when his daughter received a letter from TD Waterhouse telling her to pay $2,500 or forfeit her assets.

He said he called the brokerage immediately to clear up the problem.

"Their first excuse was that this was a keystroke error," he said. "A keystroke error is one thing, but it was done 15 times."

Gitter said the error was resolved Wednesday afternoon, and the family, which has five accounts with Waterhouse, will receive trading credits from the company.

"It was confirmed that the money was put back in my daughter's account," McKay said. "They offered me five free trades for my trouble, but I'm a little disillusioned."

Gitter said the firm does not intend to make the same mistake again.

"We do take our responsibility to our customers very seriously," she said. "We also hope this will not affect Shayna's future as an investor."

McKay said his daughter's account contains $1,700 in cash, and he has been waiting out a recent downturn in the markets before investing in stocks.

It is not clear whether he intends to use the free trading vouchers offered by Waterhouse.

"I am definitely considering looking around to other brokerages," he said.

http://www.thnt.com/news/hnt/story/0,2109,335638,00.html

-- Doris (nocents@bellsouth.net), December 29, 2000