Everbank Class Action Lawsuit

According to a court document filed by Everbank in response to a class action lawsuit initiated in California, a total of 225 investors lost $4,007,662.81 as a result of Everbank's forced closing of their Icelandic Krona denominated "CDs". That averages out to about $18,000 per account.
Everbank Lawsuit Info

More Everbank World Currency CDs Implode

The financial crisis in Eastern Europe has caused the Polish Zloty, the Czech Koruna and the Hungarian Forint to lose close to 50% of their value against the US dollar. Everbank's "European Opportunity CD" is made up of these three currencies. Likewise, $10,000 invested in an Everbank Mexican Peso certificate of deposit in August, 2008, is now worth about $6500.

Meanwhile the Icelandic Krona continues to stabilize, and has appreciated about 12% against the US dollar since the beginning of the year.

Government Collapses, Yet Icelandic Krona Still Higher Than the Rate Everbank used to Close CDs

You may have read that the Icelandic government collapsed this week. Despite the political turmoil, the Icelandic Krona is still trading significantly higher than the rate at which Everbank used to unilaterally close out several Icelandic Krona "CDs" as recently as last month. According to Forbes, the Icelandic Krona is trading at 160 to the US dollar. This is the offshore rate. In Iceland, the Krona was trading at the even higher rate of 122 to the dollar. In October and again in December, Everbank closed out several CDs at around 250 to the dollar.

Everbank WorldCurrency "CDs"- All of the Risk, One Third of the Return

In a previous post, I compared Everbank's WorldCurrency "Certificates of Deposit" to foreign currency exchange traded funds (ETFs). Foreign currency ETFs are far superior investments, in my opinion. When you invest in a foreign currency ETF, you can specify a rate of exchange (by way of a limit order) and move in and out of the ETF at will, since it trades like a stock. When you invest in a WorldCurrency "CD", Everbank decides the rate of exchange and your investment is locked in for the term of the "CD".

Moreover, the foreign exchange ETF pays a higher interest rate than Everbank. For example, the rate the CurrencyShares euro ETF currently pays is almost three times the rate that Everbank pays for its euro "CD". You read that right, the euro ETF pays about 300% the interest that the WorldCurrency euro "CD" does. In fact, in every case where an interest rate is paid, the CurrencyShares ETF pays a substantially higher rate than the comparable Everbank WorldCurrency "CD" rate.

Compare for yourself:

Everbank rates:
http://www.everbank.com/001CurrencyCDSingle.aspx

CurrencyShares rates:
http://www.currencyshares.com/home/CurrencyShares.rails

Latest Icelandic Krona/US Dollar Quote

The latest quote for the ISK/USD exchange rate is 145/$. This comes from Everbank's own publication the "Daily Pfenning" as of today. Everbank closed out my first "CD" two months ago at 250/$ and my second "CD" two weeks ago at 175/$. Both were converted back to $ against my wishes. If they had remained open as I had requested, the first "CD" would today be worth 40% more, the second "CD" 15% more. What exchange rate did Everbank use to close out your "CD"?

Class Action Lawsuit

I've read that several victims of Bernard Madoff have already filed class action lawsuits against Madoff as well as the hedge funds that invested their money with him. I'm very interested in filing a lawsuit against Everbank. What are the advantages and disadvantages of filing a lawsuit as the lone plaintiff vs. a class action lawsuit? Has anyone filed any type of a lawsuit against Everbank for their Icelandic krona shenanigans?

Currency Investing Alternatives to Everbank

Investing in foreign currencies with Everbank is like exchanging your US dollars at a hotel desk when you're visiting a foreign country. You have no control over the rate of exchange, and the rate frequently is much worse than where the currency is trading at in the open market. There are better alternatives. There are many currecncy exchange traded funds (ETFs) that pay higher interest than Everbank. Moreover, you can specify the rate of exchange at which you're willing to execute the trade and since these aren't time deposits, you can trade in and out of them at will.
List of Currency ETFs