Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, July 20, 2009

TD Ameritrade Latest Firm to Settle ARS Charges with Regulators

The SEC, NASAA and the New York AG each separately announced a settlement with TD Ameritrade regarding auction-rate securities (ARS).  Similar to other ARS settlements, the firm agrees to purchase illiquid ARS from individuals, charities, non-profits and small businesses and institutions purchased from TD Ameritrade before February 13, 2008 (collectively “retail investors”). TD Ameritrade will purchase the ARS from retail investors with accounts of $250,000 or less within seventy-five (75) days; by March, 2010, for all other eligible TD Ameritrade customers. TD Ameritrade will also fully reimburse all eligible investors who sold their auction-rate securities at a discount after the market failed and consent to a special arbitration procedure to resolve claims of consequential damages suffered by eligible investors as a result of not being able to access their funds.

In the same announcement, the New York AG also announced "imminent legal action" against Charles Schwab & Co. (“Schwab”) for deceptively selling auction-rate securities as safe, liquid, short-term investments.

Other Regulatory Action, SEC Action | Permalink

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