Average Investors May Be Locked Out of GM IPO

Charles Schwab

, and E*Trade

are not accepting client orders for the General Motors initial public offering, stating that they did not receive stock allocations. The news could be a deterrent from retail investors gaining initial access to the stock, which some speculate could be quite lucrative. "TD Ameritrade will not be participating in the GM IPO offering, as we have been informed that we will not receive an allocation of shares," said a company spokeswoman in an e-mailed statement. "We have several relationships with various underwriting firms for various products, and in this case the underwriting firm is not allocating shares for this offering." Charles Schwab and E*Trade have made similar comments, with E*Trade's website noting that there are no "current offerings" of IPOs available to customers at this time. According to CNBC.com's Kate Kelly, "The lack of available shares is a disappointment to some potential retail investors, who are frustrated that, after federal TARP funds helped a struggling GM in the depths of the financial recession, they may not be able to participate in what is expected to be a good money-making opportunity." Further exacerbating the situation is the fact that huge investment banks like Morgan Stanley

and certain hedge funds were given allocations. The typical American taxpayer isn't likely to view Wall Street profiting off of the auto bailout favorably. Citing SEC regulations, a Treasury spokesman declined to comment on the details of the offering process. In government guidelines released in September, however, the agency outlined its view of the retail involvement: "We expect that interested retail purchasers will be given ample opportunity to participate, consistent with appropriate commercial practices aimed at maximizing our return and creating a stable trading market for the shares." Will retail investors have to pay a premium for access to a stock they have equal rights to? Only time will tell.