TD Ameritrade

Last updated
TD Ameritrade Holding Corporation
Company typeDefunct
Industry Financial services
Founded1975;49 years ago (1975) (as First Omaha Securities)
FateAcquired by Charles Schwab Corporation and shut down
Headquarters Omaha, Nebraska, United States
Key people
 Joe Ricketts (Founder)
Steve Boyle (Interim President and CEO)
Services Stockbroker
Electronic trading platform
RevenueDecrease2.svg $4.358 billion (Q3 2020)
Decrease2.svg $1.930 billion (Q3 2020)
Decrease2.svg $1.393 billion (Q3 2020)
Total assets Increase2.svg $54.394 billion (2020)
Total equity Increase2.svg $9.568 billion (Q3 2020)
Number of employees
8,939 (2020)
Parent TD Ameritrade Holding Co.
Website www.tdameritrade.com
Footnotes /references
[1]

TD Ameritrade was a stockbroker that offered an electronic trading platform for the trade of financial assets including common stocks, preferred stocks, futures contracts, exchange-traded funds, forex, options, mutual funds, fixed income investments, margin lending, and cash management services. The company received revenue from interest income on margin balances, commissions for order execution, and payment for order flow.

Contents

The company was founded in 1975 as First Omaha Securities. in 2006, it acquired the United States operations of TD Waterhouse from TD Bank Group, becoming TD Ameritrade and giving TD Bank Group holding a significant ownership stake in the combined company. In 2020, TD Ameritrade was acquired by Charles Schwab Corporation and accounts were transitioned to Schwab by 2024.

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. [6] [7] [8] In 2013, the company opened a $250 million headquarters in Omaha. [9] In 2017, the company acquired the stock brokerage division of Scottrade. [10] [11] [12] [13] In April 2018, TD Ameritrade and Havas placed the first advertisement inserted within the bitcoin blockchain. [14]

In 2020, Charles Schwab Corporation acquired TD Ameritrade and the platform was shut down after all accounts were transitioned. [15] [16] [17]

Management history

In May 2008, CEO Joe Moglia vacated the CEO position, becoming Chairman. He was succeeded as CEO by COO Fredric Tomczyk. [18] [19] In 2016, Tomczyk retired as CEO and was succeeded by Tim Hockey. [20] In 2020, CEO Tim Hockey resigned amid a disagreement with the board relating to the growth of the company. [21] [22] In July 2020, Joe Moglia retired from his role as Chairman of the Board of TD Ameritrade.

Acquisition history

#YearCompanyRef(s).
11995K. Aufhauser & Company, Inc. [3]
2September 1996TransTerra [23] [24] [25]
3February 2001TradeCast [26] [27]
4July 2001National Discount Brokers [28] [29]
5September 2002Datek [30] [31]
6June 2003MyDiscountBroker.com [32]
7January 2004Bidwell [33]
8February 2004BrokerageAmerica [34]
9October 2004JB Oxford and Company [35]
10January 2006 TD Waterhouse - U.S. brokerage division [36] [37]
11February 2008 Fiserv brokerage unit [38]
12January 2009 Thinkorswim [6] [7] [8]
13September 2017 Scottrade [10] [11] [12] [13]

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 2007–2008 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 also 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.

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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. 1 2 3 "Timeline: Milestones in TD Ameritrade history". Omaha World-Herald . October 31, 2016.
  4. ↑ Levisohn, Ben (April 15, 2008). "Ameritrade: Hanging Tough" . Bloomberg News .
  5. ↑ "Ameritrade to acquire TD Waterhouse USA". www.cbc.ca. Retrieved 8 December 2015.
  6. 1 2 Stempel, Jonathan Spicer, Jonathan (January 8, 2009). "TD Ameritrade buying thinkorswim for $606 million". Reuters .{{cite news}}: CS1 maint: multiple names: authors list (link)
  7. 1 2 Ortega, Edgar (January 8, 2009). "TD Ameritrade Buys Thinkorswim to Expand in Options" . Bloomberg News .
  8. 1 2 "TD Ameritrade to buy thinkorswim for $606 million". Pittsburgh Post-Gazette. Associated Press. January 8, 2009.
  9. ↑ Hubbard, Russell (July 31, 2013). "TD Ameritrade shows off its new $250 million headquarters". Omaha World-Herald .
  10. 1 2 Edwards, Greg (September 18, 2017). "TD Ameritrade closes on acquisition of Scottrade" . American City Business Journals .
  11. 1 2 Bray, Chad (October 24, 2016). "TD Ameritrade to Buy Scottrade in $4 Billion Deal". The New York Times . ISSN   0362-4331.
  12. 1 2 Brown, Lisa (September 18, 2017). "TD Ameritrade closes on purchase of Scottrade, up to 1,000 job cuts planned". St. Louis Post-Dispatch .
  13. 1 2 Barr, Diana (2016-10-24). "Scottrade being sold to TD Ameritrade" . American City Business Journals .
  14. ↑ Swant, Marty (April 26, 2018). "TD Ameritrade and Havas Placed an Ad on the Blockchain". AdWeek .
  15. ↑ Baguios, John (October 6, 2020). "Charles Schwab completes acquisition of TD Ameritrade". S&P Global .
  16. ↑ "Charles Schwab completes its $26B purchase of TD Ameritrade". Associated Press. October 6, 2020.
  17. ↑ Brin, Dinah Wisenberg (May 10, 2024). "Schwab Shuts TD Ameritrade Platforms for Good". thinkadvisor.
  18. ↑ "TD Ameritrade names COO Fred Tomczyk as next CEO". Fox News. Associated Press. May 15, 2008.
  19. ↑ "TD Ameritrade COO named next CEO". The Globe and Mail. Bloomberg News. May 16, 2008.
  20. ↑ King, Rita Trichur And Carolyn (November 10, 2015). "TD Bank Shakes Up Top Ranks, Tim Hockey Departs for Ameritrade" . The Wall Street Journal . ISSN   0099-9660.
  21. ↑ Matthews, Jessica (July 22, 2019). "TD Ameritrade CEO to exit amid disagreement with board" . Financial Planning.
  22. ↑ Beilfuss, Lisa (July 22, 2019). "TD Ameritrade Begins Search for New CEO" . The Wall Street Journal . ISSN   0099-9660.
  23. ↑ "AMERITRADE HOLDING CORPORATION Form S-1". NASDAQ. January 21, 1997.
  24. ↑ Kamen, Ken (September 2, 2010). Reclaim Your Nest Egg: Take Control of Your Financial Future. John Wiley & Sons. ISBN   9781118004159.
  25. ↑ Juds, Scott M. (April 15, 2018). Conquering the Seven Faces of Risk: Automated Momentum Strategies that Avoid Bear Markets, Empower Fearless Retirement Planning. BookBaby. ISBN   9781543931709.
  26. ↑ "Company News; ameritrade, in acquisition, seeks institutional clientsS" . The New York Times . Bloomberg News. February 15, 2001.
  27. ↑ "Ameritrade buys TradeCast". CNN . February 14, 2001.
  28. ↑ "Ameritrade in deal to buy NDB.com". Chicago Tribune . August 1, 2001.
  29. ↑ "Ameritrade will buy national discount brokers" . The New York Times . Reuters. August 1, 2001.
  30. ↑ Sorkin, Andrew Ross (April 8, 2002). "Ameritrade In Deal to Buy Online Rival Datek" . The New York Times .
  31. ↑ Craig, Susanne (April 8, 2002). "Ameritrade Agrees to Buy Datek In $1.29 Billion Stock Agreement" . The Wall Street Journal .
  32. ↑ "SWS sells Mydiscountbroker accounts for $4.2M" . American City Business Journals . June 16, 2003.
  33. ↑ "Ameritrade to buy Bidwell & Co" . American City Business Journals . November 7, 2003.
  34. ↑ "Ameritrade to acquire BrokerageAmerica retail accounts". Finextra. October 3, 2003.
  35. ↑ "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.
  36. ↑ Ian, Austen (June 23, 2005). "TD Waterhouse USA Is Sold to Ameritrade" . The New York Times .
  37. ↑ "Ameritrade Closes TD Waterhouse Acquisition". NBC News. Associated Press. January 25, 2006.
  38. ↑ "Sale of Fiserv unit to TD Ameritrade closes". American City Business Journals . February 4, 2008.
  39. ↑ "TD Ameritrade Hacked; Customer Info Stolen". CNBC. Associated Press. September 14, 2007.
  40. ↑ "TD Ameritrade's six million customers hit with security breach". CNET. November 26, 2007.
  41. ↑ Bolado, Carolina (September 13, 2011). "TD Ameritrade Settles Data Breach Suit For Up To $6.5M" . Law360 .
  42. ↑ Kravets, David (July 11, 2008). "Ameritrade Hack Settlement: $2 Per Victim, $1.8 Million for Lawyers". Wired .
  43. ↑ Rooney, Kate; Khorram, Yasmin (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. ↑ "SEC Charges TD Ameritrade for Auction Rate Securities Sales Practices" (Press release). U.S. Securities and Exchange Commission. July 20, 2009.
  46. ↑ "TD Ameritrade Agrees To Auction-Rate Buyback" . The New York Times . Associated Press. July 20, 2009.
  47. ↑ HOLZER, JESSICA; MAXEY, DAISY (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 .
  49. ↑ MAXEY, DAISY (September 12, 2009). "Reserve Yield Plus Investors in SEC Plea" . The Wall Street Journal .
  50. ↑ ANAND, SHEFALI; SCANNELL, KARA (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. ↑ "Investors in fallen money fund Reserve Yield Plus can't access cash" . New York Daily News . Associated Press. October 3, 2008.
  53. ↑ "SEC Charges TD Ameritrade for Failing to Supervise Its Representatives Who Sold Shares of the Reserve Yield Plus Fund" (Press release). 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" (PDF) (Press release). 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.
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