Recently, one of my holdings underwent a reverse split. I was surprised (but not all that surprised) that there was an additional fee of $20.00 assessed, labeled as a "reorganization fee". This was assessed by the company whose stock had undergone the split, not the brokerage.

I'm assuming that this fee is to handle all of the paperwork involved in reissuing shares, etc., but there is no indication of this. Where is this money going?

1 Answer 1


Its a broker fee, not something charged by the reorganizing company. E*Trade charge $38 (see Reorganizations under Other fees), TD Ameritrade charge $38. As with any other bank fee - shop around. If you know the company is going to do a split, and this fee is of a significant amount for you - move your account to a different broker.

It may be that some portion of the fee is shared by the broker with the shares managing services provider of the reorgonizing company, don't know for sure. But you're charged by your broker.

Note that the fees differ for voluntary and involuntary reorganizations, and also by your stand with the broker - some don't charge their "premier" customers.

  • Thank you. The way it was invoiced was very confusing. I may have a chat with them tomorrow!
    – jonsca
    Jan 2, 2014 at 0:16
  • 1
    I'm surprised these things can't be denied outright and the bill sent back to the company doing the reverse split unpaid.
    – Joshua
    Sep 6, 2017 at 21:09
  • All I did was ask E*Trade what the fee was, and why I had a negative balance in my IRA. Customer Service issued a refund of the fee, "since I didn't know about the fee." I guess it's one more reason that index funds can be good investments. I didn't even have much of the stock that reorganized-- the fee was almost 10% of the stock value!
    – ps2goat
    Jan 3, 2020 at 4:43

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