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TAG | TD Ameritrade Holding Corp.

Sep/11

14

E*Trade Gets Wells Notice For Auction-Rate Securities

Comments off · Posted by Securities Lawyer in FINRA

NEW YORK - In an article from FoxBusiness.com, Brett Philbin writes that  E*Trade Financial Corp. (ETFC)  received a Wells notice from the Financial Industry Regulatory Authority related to the purchase of auction-rate securities by customers of one of its subsidiaries, according to a regulatory filing.  A Wells notice indicates that regulators are recommending enforcement action and gives the company a chance to respond.

Auction-rate securities are long-term debt instruments with attributes of short-term securities because they were resold with new interest rates in periodic auctions. Investors eventually found themselves stuck with the securities after the market froze.

The article states that in its annual report filed with the Securities and Exchange Commission (SEC), the New York online brokerage said its E*Trade Securities, LLC, unit received the notice Feb. 9. E*Trade is the latest online brokerage to face pressure from regulators to make investors whole following the breakdown of the ARS market in 2008.

Philbin writes that last spring, rival TD Ameritrade Holding Corp. (AMTD) agreed to repurchase $305 million in auction-rate securities from clients, while Charles Schwab Corp. (SCHW) received a Wells notice of its own from the SEC as well as a civil complaint from the New York Attorney General in 2009. Schwab filed a motion to dismiss the AG’s case and told Finra it believes the enforcement charges are unwarranted.

 The FoxBusiness article said that in the filing, E*Trade said it is “cooperating with these inquiries and will submit a Wells response to Finra setting forth the bases for E*TRADE Securities’ belief that disciplinary action is not warranted.” The company said the total amount of auction-rate securities held by its customers was $138.2 million as of Dec. 31, 2010.

Securities Attorney, Lars Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you feel you have become a victim of  auction-rate securities losses through E*Trade Financial Corporation, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses.  To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com

Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

 

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Sep/11

7

The SEC Announced $10 mill settlement with TD Ameritrade

Comments off · Posted by Securities Lawyer in FINRA

 Josh Funk, a business writer for the AP wrote that  TD Ameritrade has agreed to a $10 million settlement for failing to properly supervise representatives who misled investors about the safety of a money-market mutual fund that “broke the buck” in 2008, the Securities and Exchange Commission said.

Funk writes that TD Ameritrade Holding Corp. customers who still hold shares of Reserve Management Corp.’s Yield Plus Fund should receive 1.2 cents per share as part of the settlement.

The AP article goes on to say that the SEC said Ameritrade representatives failed to disclose the risks of the Yield Plus Fund and some representatives told investors the fund was as safe as cash even though it wasn’t guaranteed like a money-market fund. The Yield Plus Fund “broke the buck” in September 2008 when the value of its assets fell below the level needed to cover every dollar invested in the fund.

“It is critical that customers get accurate information about investment products, and broker-dealers must provide the training and supervision that enables their representatives to deliver this important guidance,” said Julie Lutz, associate director of the SEC’s Denver office. “TD Ameritrade failed to establish the policies and procedures necessary to reasonably supervise its employees and prevent these misrepresentations to investors.”

It was noted in the AP article that TD Ameritrade did not admit wrongdoing in the settlement. TD Ameritrade issued a three-paragraph statement about the settlement, but representatives of the Omaha-based company did not respond to questions about the settlement.

SEC said that thousands of TD Ameritrade customers continue to hold the majority of the Yield Plus Funds shares. Those people received about 95 percent of their original investments back after the fund liquidated its assets.

Funk adds that the problems in several of Reserve’s money-market mutual funds during the financial crisis led institutional investors to pull out cash and created fears about the safety of the $3.4 trillion in assets held in money-market funds. That sell-off prompted the federal government to announce a temporary program to guarantee money funds, should one of them break the buck again.

In the fall of 2008, Ameritrade said it would spend up to $55 million to help cover losses its customers suffered while investing in two troubled money-market mutual funds: Reserve Management Corp.’s Primary Fund and The International Liquidity Fund.

Securities Attorney, Lars Soreide, of Soreide Law, PLLC, has represented clients nationwide. If you or a family member feel you have become a victim of stock/securities loss, call a Securities Arbitration Lawyer for a free consultation on how to potentially recover your losses.  To speak with an attorney, call 888-760-6552, or visit www.securitieslawyer.com

Soreide Law Group, PLLC., representing investors nationwide before FINRA  the Financial Industry Regulatory Authority.

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