I wouldn't waste my time with small claims court, you signed a binding arbitration agreement when you opened up the account. The brokerages carefully guard these binding arb agreements becuase they protect them from otherwise unlimited litigation. If you do take it to small claims they will probably not show up, then appeal the verdict so it will go to a real court. You will then have to pay for a lawyer and the whole thing becomes more trouble then its worth.
Also, although I dislike E*Trade as much as you, what they did in your case is not even wrong. The industry standard when you ask to transfer an account is to transfer the stock or funds, not to automatically liquidate. Unless you specifically told them to liquidate prior to the transfer, they did the right thing by just transfering the fund. Although in your case it was adventageous to liquidate, most people are sitting on potential capitol gains that they don't want to have to pay just because they transfer brokers.

hey CG, I can't say whether or not ETrade has an enforceable arbitration clause. In my small claims action they never bothered to appear, so I got a default judgment. They cannot appeal that, and I will eventually collect. I doubt that they could enforce an arbitration clause if you allege fraud or misrepresentation. http://www.flyertalk.com/forum/smile.gif

To the contrary, E*Trade can appeal a default judgement. In California, they have 30 days in which to act, then the judgement stands, the requirements vary by state. See http://www.nolo.com/encyclopedia/articles/cm/cm31.html Nolo puts out a very good book on small claims cases for the layman and in it they specifically say that even a default judgement can be appealed. They also talk about the difficulty of collection, please keep us informed of how/when you finally collect. They say in some cases you can have a deputy actually go into the place of business and take the money out of the till. If you could do that to E*Trade and get a video it would make my day to watch it.