TD Ameritrade

Overview

TD Ameritrade Holding Corporation

fate	Acquired by Charles Schwab Corporation and shut down
foundation	1975 (as First Omaha Securities)
founder	Joe Ricketts
defunct	2024
hq location	Omaha, Nebraska, United States
key people	Steve Boyle (Interim president and CEO)
type	Private
industry	Financial services
services	Stockbroker<BR>Electronic trading platform
revenue	$4.358 billion (Q3 2020)
operating income	$1.930 billion (Q3 2020)
net income	$1.393 billion (Q3 2020)
assets	$54.394 billion (2020)
equity	$9.568 billion (Q3 2020)
num employees	8,939
num employees year	2020
parent	Charles Schwab Corporation
footnotes	‡R1R‡

TD Ameritrade Holding Corporation was a stockbroker that offered an electronic trading platform for the trade of financial assets. The company was founded in 1975 as First Omaha Securities. In 2006, it acquired the United States operations of TD Waterhouse from Toronto-Dominion Bank and was renamed TD Ameritrade. In 2020, TD Ameritrade was acquired by Charles Schwab Corporation.

History

In 1975, the company was founded as First Omaha Securities by Joe Ricketts.[2] In 1983, Ameritrade Clearing Inc. was established as a central counterparty clearing broker.[3] In 1988, the company introduced the first quote and order entry system via the push-button telephone.[3]

Legal actions

Security breaches

In November 2007, the company reported that hackers gained access to most of its clients' names, Social Security numbers, dates of birth, addresses, phone numbers, and trading activity.[39][40] In 2011, after being sued in a class action, the company settled by agreeing to compensate customers that were victim to identity theft between $50 and $2,500 each.[41] The settlement was criticized for netting the attorneys almost as much money as the victims.[42] In 2020, customer login information was being sold on the dark web.[43]

Auction rate securities scandal

In 2009, TD Ameritrade settled a lawsuit alleging it had marketed auction rate securities as short-term investments. The settlement included a $456 million payment and the buyback of the securities, compensating investors for losses.[44][45][46]

Customer losses in Reserve funds

The company and its registered advisors recommended to its customers to invest cash holdings in a money market fund that was an affiliate of the Reserve Primary Fund and the fund gained approximately $1 billion in assets as a result of such marketing by the company. It also represented that an affiliated fund, the Reserve Yield Plus, was a safe money market fund, when it actually was a bond fund. The company received commissions for steering customers. In September 2008, during the 2008 financial crisis, as a result of holdings in securities of Lehman Brothers, the Reserve Primary Fund was forced to break the buck and $1 billion in cash equivalents of TD Ameritrade clients were frozen and the Reserve Yield Plus declined in value. The company was accused of having a conflict of interest as a result of commissions that it received, for having poor marketing ethics, and for misrepresenting the safety of the investments. The company was named in class action lawsuits by its customers and the U.S. Securities and Exchange Commission launched an investigation into its marketing practices. In 2008, the company agreed to reimburse its customers for up to a 3% loss in the Reserve Primary Fund, or up to $50 million. In 2011, the company settled the SEC case and agreed to pay 1.2¢ per share of the Reserve Yield Plus Fund that was held by its customers, or $10 million in total. The Reserve Yield Plus made its final distribution in 2016 and investors received 97 to 98 cents per share in addition to compensation from TD Ameritrade.[47][48]

India

In September 2022, the Reserve Bank of India (RBI), India's central bank, released a list of 34 forex trading online platforms, in which TD Ameritrade was listed as an illegal platform in India.[56]

TD Ameritrade

History

Management history

Acquisition history

Legal actions

Security breaches

Auction rate securities scandal

Customer losses in Reserve funds

India

Sponsorships

External links

References