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TD Ameritrade

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]

In March 1997, the company became a public company via an initial public offering.[4] 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.[5]

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.[6] 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.[7]

In 2020, Charles Schwab Corporation acquired TD Ameritrade and the platform was shut down in May 2024 after all accounts were transitioned.[8][9][10]

Management history

In May 2008, CEO Joe Moglia vacated the CEO position, becoming Chairman. He was succeeded as CEO by COO Fredric Tomczyk.[11][12] In 2016, Tomczyk retired as CEO and was succeeded by Tim Hockey.[13] In 2020, CEO Tim Hockey resigned amid a disagreement with the board relating to the growth of the company.[14][15] 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.[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][49][50][51][52][53][54][55]

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]

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.[57] After the acquisition by Charles Schwab Corporation, they retained ownership of the naming rights; the baseball venue was subsequently renamed Charles Schwab Field Omaha.

External links

References

  1. TD Ameritrade Holding Corporation FY 2018 Form 10-K Annual Report U.S. Securities and Exchange Commission^
  2. The Next Charles Schwab? Forbes, retrieved 2024-06-11^
  3. Timeline: Milestones in TD Ameritrade history Omaha World-Herald, October 31, 2016^
  4. Ben Levisohn. Ameritrade: Hanging Tough Bloomberg News, April 15, 2008^
  5. Ameritrade to acquire TD Waterhouse USA www.cbc.ca, retrieved 8 December 2015^
  6. Russell Hubbard. TD Ameritrade shows off its new $250 million headquarters Omaha World-Herald, July 31, 2013^
  7. Marty Swant. TD Ameritrade and Havas Placed an Ad on the Blockchain AdWeek, April 26, 2018^
  8. John Baguios. Charles Schwab completes acquisition of TD Ameritrade S&P Global, October 6, 2020^
  9. Charles Schwab completes its $26B purchase of TD Ameritrade October 6, 2020^
  10. Dinah Wisenberg Brin. Schwab Shuts TD Ameritrade Platforms for Good thinkadvisor, May 10, 2024^
  11. TD Ameritrade names COO Fred Tomczyk as next CEO Fox News, May 15, 2008^
  12. TD Ameritrade COO named next CEO The Globe and Mail, May 16, 2008^
  13. Rita Trichur And Carolyn King. TD Bank Shakes Up Top Ranks, Tim Hockey Departs for Ameritrade The Wall Street Journal, November 10, 2015^
  14. Jessica Matthews. TD Ameritrade CEO to exit amid disagreement with board Financial Planning, July 22, 2019^
  15. Lisa Beilfuss. TD Ameritrade Begins Search for New CEO The Wall Street Journal, July 22, 2019^
  16. AMERITRADE HOLDING CORPORATION Form S-1 NASDAQ, January 21, 1997^
  17. Ken Kamen. Reclaim Your Nest Egg: Take Control of Your Financial Future John Wiley & Sons, September 2, 2010^
  18. Scott M. Juds. Conquering the Seven Faces of Risk: Automated Momentum Strategies that Avoid Bear Markets, Empower Fearless Retirement Planning BookBaby, April 15, 2018^
  19. Company News; ameritrade, in acquisition, seeks institutional clients The New York Times, February 15, 2001^
  20. Ameritrade buys TradeCast CNN, February 14, 2001^
  21. Ameritrade in deal to buy NDB.com Chicago Tribune, August 1, 2001^
  22. Ameritrade will buy national discount brokers The New York Times, August 1, 2001^
  23. Andrew Ross Sorkin. Ameritrade In Deal to Buy Online Rival Datek The New York Times, April 8, 2002^
  24. Susanne Craig. Ameritrade Agrees to Buy Datek In $1.29 Billion Stock Agreement The Wall Street Journal, April 8, 2002^
  25. SWS sells Mydiscountbroker accounts for $4.2M American City Business Journals, June 16, 2003^
  26. Ameritrade to buy Bidwell & Co. American City Business Journals, November 7, 2003^
  27. Ameritrade to acquire BrokerageAmerica retail accounts Finextra, October 3, 2003^
  28. Filed by TD Ameritrade Holding Corporation Pursuant to Rule 425 Under the Securities Act of 1933 U.S. Securities and Exchange Commission, October 12, 2004^
  29. Austen Ian. TD Waterhouse USA Is Sold to Ameritrade The New York Times, June 23, 2005^
  30. Ameritrade Closes TD Waterhouse Acquisition NBC News, January 25, 2006^
  31. Sale of Fiserv unit to TD Ameritrade closes American City Business Journals, February 4, 2008^
  32. Jonathan Spicer, Jonathan Stempel. TD Ameritrade buying thinkorswim for $606 million Reuters, January 8, 2009^
  33. Edgar Ortega. TD Ameritrade Buys Thinkorswim to Expand in Options Bloomberg News, January 8, 2009^
  34. TD Ameritrade to buy thinkorswim for $606 million Pittsburgh Post-Gazette, January 8, 2009^
  35. Greg Edwards. TD Ameritrade closes on acquisition of Scottrade American City Business Journals, September 18, 2017^
  36. Chad Bray. TD Ameritrade to Buy Scottrade in $4 Billion Deal The New York Times, October 24, 2016^
  37. Lisa Brown. TD Ameritrade closes on purchase of Scottrade, up to 1,000 job cuts planned St. Louis Post-Dispatch, September 18, 2017^
  38. Diana Barr. Scottrade being sold to TD Ameritrade American City Business Journals, 2016-10-24^
  39. TD Ameritrade Hacked; Customer Info Stolen CNBC, September 14, 2007^
  40. TD Ameritrade's six million customers hit with security breach CNET, November 26, 2007^
  41. Carolina Bolado. TD Ameritrade Settles Data Breach Suit For Up To $6.5M Law360, September 13, 2011^
  42. David Kravets. Ameritrade Hack Settlement: $2 Per Victim, $1.8 Million for Lawyers Wired, July 11, 2008^
  43. Kate Rooney, Yasmin Khorram. Hackers look to buy brokerage log-ins on the dark web with Robinhood fetching highest prices CNBC, October 14, 2020^
  44. Julianne Pepitone. TD Ameritrade settles auction-rate securities case for $456M CNN, July 20, 2009^
  45. SEC Charges TD Ameritrade for Auction Rate Securities Sales Practices U.S. Securities and Exchange Commission, July 20, 2009^
  46. TD Ameritrade Agrees To Auction-Rate Buyback The New York Times, July 20, 2009^
  47. JESSICA HOLZER, DAISY MAXEY. TD Ameritrade Settles SEC Case Over Reserve Fund The Wall Street Journal, February 4, 2011^
  48. Michael Oneal. Fund losses fuel customers' anger; Revenue-sharing deal raises questions of conflict Chicago Tribune, November 2, 2008^
  49. DAISY MAXEY. Reserve Yield Plus Investors in SEC Plea The Wall Street Journal, September 12, 2009^
  50. SHEFALI ANAND, KARA SCANNELL. Ameritrade to Make Clients Whole on Primary Fund The Wall Street Journal, September 25, 2008^
  51. EILEEN AMBROSE. Investors feel burned by what looked like a money market fund The Baltimore Sun, December 16, 2008^
  52. Investors in fallen money fund Reserve Yield Plus can't access cash New York Daily News, October 3, 2008^
  53. 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, February 3, 2011^
  54. SEC Announces $10M Settlement With TD Ameritrade CBS News, February 3, 2011^
  55. FEDERAL COURT APPROVES FINAL DISTRIBUTION OF ASSETS Reserve Funds, April 11, 2016^
  56. RBI issues alert list: Declares these 34 forex trading online platforms as illegal The Times of India, September 11, 2022^
  57. TD Ameritrade Inks Naming-Rights Deal For CWS Ballpark In Omaha Advance Publications, June 9, 2009^