Ally Invest Securities Low-Priced Securities Disclosure

Ally Invest defines a low-priced security as any equity stock below $2.00. Low-priced securities are charged a $4.95 base commission plus $0.01 per share on the entire order. In general, the maximum commission charge is 5%. If the principal value of the order is less than the base, the commission is equal to the full trade value. We require a minimum opening purchase of $100 per order in OTCBB and Pink Sheet stocks and don’t accept opening trades for stocks priced below $0.01 per share.

Low-priced securities are sometimes referred to as “penny stocks” or “microcap stocks.”  Penny stocks are shares of small companies usually quoted on a bulletin board (over the counter) and not listed on an exchange or quoted on Nasdaq. Prices are usually under $5.00 or are often not available. Microcap Stocks are generally securities issued by companies with a market capitalization of less than $250-$300M.

Investments in penny stocks are speculative and involve considerable risk. Penny stocks frequently exhibit high price volatility and erratic market movements. Often, when investors buy or sell these securities, they affect the quoted price significantly. In some cases, it may not be possible to liquidate a position in a penny stock within a reasonable period, subjecting the position to additional fees (read below Additional Fees section).

It may be difficult to properly value an investment in penny stocks. Reliable information regarding issuers of these securities, their prospects, or the risks associated with investing in such securities may not be available. Certain issuers of penny stocks have no obligation to provide information to investors. Some issuers register securities with the Securities and Exchange Commission (SEC) and may provide regular reports to investors. Others, however, may not be required to maintain such registration or provide such reports. Securities may continue to be traded if issuers are delinquent in their reporting obligation to the SEC or other federal or state regulatory agencies.

Penny stocks haven’t been approved or disapproved by the Securities and Exchange Commission (SEC). The SEC hasn’t passed upon the fairness, merits, accuracy, or adequacy of the information contained in any prospectus or any other information provided by an issuer, broker, or dealer of penny stocks.

FEES

Penny stocks are subject to settlement fees if they are non-DTC-eligible securities (can be traded electronically but require physical certificates to be settled). The Depository Trust Company (DTC) provides clearing, settlement, and information services for certain securities. Certain penny stocks securities are not DTC-eligible or have had their eligibility revoked. As a result, the settlement of these physical positions can carry significant pass-through charges for our clearing firm, Apex Clearing Corp. These charges include execution fees, DTC fees, deposit fees, New York window fees, and transfer agent fees. These fees, which can vary and may be substantial, increase the clearing and execution costs that Apex Clearing Corp passes through to you.

Customers who trade penny stocks and non-DTC-eligible securities are responsible for these charges, which can significantly higher than the value of the trade. Orders that require executions with multiple contra-parties will result in settlement fees for each separate transaction. Neither Ally Invest nor Apex Clearing Corp mark up any of these fees before they are passed through to customers. These pass-through charges may not be immediately charged to a customer account following a trade in non-DTC-eligible securities, as our clearing firm may receive notice of such fees several weeks following the trade. We reserve the right to withhold funds in a customer account pending potential assessment of fees associated with trading in penny stocks. It’s your responsibility to investigate the eligibility status of an equity before trading it. To confirm eligibility, you should contact the specific company whose equity you intend to trade.