TD Ameritrade

History

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

In March 1997, the company became a public company via an initial public offering. In 2006, Ameritrade purchased the American operations of TD Waterhouse from TD Bank Group. The combined company was renamed TD Ameritrade, and TD Bank Group was given a 39% stake in the company. As part of the deal, Ameritrade sold its Canadian operations to TD Bank who merged them with TD Waterhouse Canada.

In January 2009, TD Ameritrade acquired thinkorswim in a cash and stock deal valued around $606 million. In 2013, the company opened a $250 million headquarters in Omaha. In 2017, the company acquired the stock brokerage division of Scottrade. In April 2018, TD Ameritrade and Havas placed the first advertisement inserted within the bitcoin blockchain.

In 2020, Charles Schwab Corporation acquired TD Ameritrade and the platform was shut down in May 2024 after all accounts were transitioned.

Management history

In May 2008, CEO Joe Moglia vacated the CEO position, becoming Chairman. He was succeeded as CEO by COO Fredric Tomczyk. In 2016, Tomczyk retired as CEO and was succeeded by Tim Hockey. In 2020, CEO Tim Hockey resigned amid a disagreement with the board relating to the growth of the company. In July 2020, Joe Moglia retired from his role as Chairman of the Board of TD Ameritrade.

Acquisition history

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. 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. The settlement was criticized for netting the attorneys almost as much money as the victims. In 2020, customer login information was being sold on the dark web.

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.

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.

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.

Sponsorships

The company owned the naming rights to the baseball field TD Ameritrade Park Omaha, for which it would pay an average of $1 million a year for a twenty-year contract period starting in 2011. After the acquisition by Charles Schwab Corporation, they retained ownership of the naming rights; the baseball venue was subsequently renamed Charles Schwab Field Omaha.

References

References

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2. "The Next Charles Schwab?".
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5. "Ameritrade to acquire TD Waterhouse USA". www.cbc.ca.
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7. Swant, Marty. (April 26, 2018). "TD Ameritrade and Havas Placed an Ad on the Blockchain". [[AdWeek]].
8. Baguios, John. (October 6, 2020). "Charles Schwab completes acquisition of TD Ameritrade". [[S&P Global]].
9. (October 6, 2020). "Charles Schwab completes its $26B purchase of TD Ameritrade".
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42. Kravets, David. (July 11, 2008). "Ameritrade Hack Settlement: $2 Per Victim, $1.8 Million for Lawyers".
43. (October 14, 2020). "Hackers look to buy brokerage log-ins on the dark web with Robinhood fetching highest prices". [[CNBC]].
44. Pepitone, Julianne. (July 20, 2009). "TD Ameritrade settles auction-rate securities case for $456M". [[CNN]].
45. (July 20, 2009). "SEC Charges TD Ameritrade for Auction Rate Securities Sales Practices". [[U.S. Securities and Exchange Commission]].
46. (July 20, 2009). "TD Ameritrade Agrees To Auction-Rate Buyback". [[The New York Times]].
47. (February 4, 2011). "TD Ameritrade Settles SEC Case Over Reserve Fund". [[The Wall Street Journal]].
48. Oneal, Michael. (November 2, 2008). "Fund losses fuel customers' anger; Revenue-sharing deal raises questions of conflict". [[Chicago Tribune]].
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50. (September 25, 2008). "Ameritrade to Make Clients Whole on Primary Fund". [[The Wall Street Journal]].
51. AMBROSE, EILEEN. (December 16, 2008). "Investors feel burned by what looked like a money market fund". [[The Baltimore Sun]].
52. (October 3, 2008). "Investors in fallen money fund Reserve Yield Plus can't access cash". [[New York Daily News]].
53. (February 3, 2011). "SEC Charges TD Ameritrade for Failing to Supervise Its Representatives Who Sold Shares of the Reserve Yield Plus Fund". [[U.S. Securities and Exchange Commission]].
54. (February 3, 2011). "SEC Announces $10M Settlement With TD Ameritrade". [[CBS News]].
55. (April 11, 2016). "FEDERAL COURT APPROVES FINAL DISTRIBUTION OF ASSETS". Reserve Funds.
56. (September 11, 2022). "RBI issues alert list: Declares these 34 forex trading online platforms as illegal". [[The Times of India]].
57. (June 9, 2009). "TD Ameritrade Inks Naming-Rights Deal For CWS Ballpark In Omaha". [[Advance Publications]].