TD Ameritrade

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This article is about the online broker. For banks of similar branding, see TD Bank.
TD Ameritrade Holding Corporation
Traded as NYSEAMTD
Industry Brokerages
Founded Omaha, Nebraska (1971)
Headquarters Omaha, Nebraska, USA
Key people
Fredric Tomczyk, CEO
Joe Moglia, Chairman
J. Joseph Ricketts, Founder
William Gerber, CFO
Tom Bradley, President, Retail
Tom Nally, President, Institutional
Products Stock brokerage
Revenue Increase$2.771 billion USD (2013)[1]
Increase$675 million USD (2013)[1]
Number of employees
5,312 (2012)

TD Ameritrade is an American online broker based in Omaha, Nebraska. TD Ameritrade Holding Corporation is the owner of TD Ameritrade Inc. Services offered include common and preferred stocks, futures, ETFs, option trades, mutual funds, fixed income, margin lending, and cash management services.[2]

As of December 31, 2012, Ameritrade had 5,836,000 funded customer accounts and client assets of $481 billion.


TD Ameritrade traces back its lineage to a small investment banking firm and First Omaha Securities, Inc. (later Accutrade) in Omaha, Nebraska. Ameritrade Clearing Inc. was established as a clearing broker in 1983, and by 1987 TransTerra Company became the holding company for Ameritrade, and the company was subsequently known as TransTerra Company. In 1988, the company introduced the first quote and order entry system via the touch-tone phone. In 1995, the company acquired K. Aufhauser & Company, Inc. and its WealthWeb, the first firm to offer online securities trading, receiving the first order in August 1994. In October 1995, Ameritrade acquired All American Brokers. In January 1996, TransTerra's Accutrade launched "Accutrade for Windows," the first online investing system that let individuals partake in program investing and basket trading. By May 1996, TransTerra launched an Internet only broker called eBroker, and by November, TransTerra Company became Ameritrade Holding Corporation.

In March 1997, Ameritrade became a publicly held company, and its IPO opened at $15 per share. In August 1999, Accutrade (then a division of Ameritrade) acquired The R.J. Forbes Group, Inc. Ameritrade formed Freetrade in November 2000, which provided commission-free equity market orders. Freetrade was later replaced by Ameritrade Izone, which offered $5 equity market orders, though it no longer exists. In 2001, Ameritrade made two acquisitions: the February acquisition of TradeCast, giving Ameritrade a presence in the business-to-business arena, and the September acquisition of National Discount Brokers Corporation, adding $6.3 billion in client assets.

In 2002, Ameritrade merged with Datek Online Holdings Corporation, and changed commissions to $10.99 from $8 for market orders and $12 for limit and stop orders. Ameritrade purchased in June 2003, and client accounts reached 3 million. In 2004, Ameritrade completed the purchase of Bidwell and Company in January, BrokerageAmerica in February, Investex in May and JB Oxford and Company in October. As of August 2007, there were reports suggesting that Ameritrade was engaged in merger talks with E*TRADE.

In 2008, long-time CEO Joe Moglia announced he would be vacating the CEO position in the upcoming fall after seven years to pursue other interests. Fred Tomczyk, the former COO, was named his successor and took over in September 2008. Rumors [weasel words] started that the company was going to move its headquarters out of the Omaha area after Moglia took over the Chairman position from founder and former CEO J. Joseph Ricketts. With the departure of Ricketts, who founded the company in Omaha, the company for the first time in its history had no members from the founding family on its management team, outside of the two that remained on the Board of Directors. Tomczyk further strengthened the rumors when he stated that he would not be moving to Omaha, but rather staying in the New York City area, where he is based. However, those rumors were put to rest when in October 2008 plans were unveiled for the new TD Ameritrade headquarters in Omaha. The new headquarters would consolidate the call center and corporate offices together into one building. The new building was planned for development in the Old Mill area of Omaha, with a scheduled completion date of 2013. Tomcyzk later confirmed that the company considered moving out of the Omaha area, but decided to stay because of the large number of employees based in Omaha.

Tomczyk announced on June 10, 2009, that the name of the new ballpark will be TD Ameritrade Park Omaha. He had also made a statement that morning that this move is a sign that the company will continue to be headquartered in Omaha. TD Ameritrade will be paying an average of $1 million a year for the naming rights.[3] The NCAA has also mentioned that they are interested in talking with the company about a corporate sponsorship.[4]

Acquisition of Thinkorswim Group Inc.[edit]

On January 7, 2009 TD Ameritrade acquired Thinkorswim Group Inc. (NASDAQ:SWIM), including its INVESTools Investor Education division, in a cash and stock deal valued at approximately $606 million. The transaction aimed to advance TD Ameritrade's growth strategy on the trading side of the business.[5]

Acquisition of TD Waterhouse USA[edit]

On January 24, 2006, Ameritrade Holding Corporation acquired TD Waterhouse USA from TD Bank Financial Group.[6] Following the acquisition, it renamed itself TD Ameritrade. TD Ameritrade is one of the largest online brokerages, with 6.3 million funded client accounts and $663 billion in client assets.[7] Revenue and net income are expected to increase to $1.8 billion and $557 million, respectively. TD Bank now owns 39% of TD Ameritrade, and purchased Ameritrade's Canadian brokerage operations for $60 million cash. As part of the acquisition, Ameritrade investors received a special one-time $6 dividend, funded from Ameritrade borrowings and excess cash contributed to TD Waterhouse USA by TD Bank. TD Bank will limit their ownership of TD Ameritrade to 45% for up to ten years after the acquisition, while founder J. Joseph Ricketts will limit his family's ownership of TD Ameritrade to 29% for ten years after the acquisition. Ameritrade CEO Joe Moglia became the CEO of TD Ameritrade.

Controversies and scandals[edit]

Security breach and resulting identity theft risk and class action lawsuit[edit]

In October 2005, several people posting to nanae (the Usenet newsgroup) began to uncover what was at the time the third largest dataloss incident ever[8] when they reported spam to the disposable email addresses they'd given (only) to Ameritrade that were not the result of a Directory Harvest Attack and TD Ameritrade staff reported that it was investigating the matter.

Reports of an ongoing problem continued. For example, on March 30, 2007, a Slashdot article reported that unique email addresses provided only to TD Ameritrade were frequently becoming targets for spammers.[9] There was speculation that one of TD Ameritrade's affiliated companies was the source of the leaks.[10]

However, in mid-September 2007 media including the Associated Press and British tabloid IT-news portal The Register reported that TD Ameritrade had disclosed that TD Ameritrade had itself fallen victim to a backdoor-based network attack, and that a database containing all 6.4 million customer Social Security numbers, names, addresses, and E-mail addresses had been compromised. The Register alleges said breach was disclosed only after a class action lawsuit started against the TD Group.[11][12] TD Ameritrade has stated that the stolen information included account information such as account balances.[13]

TD Ameritrade and the Auction Rate Securities Scandal[edit]

In 2009, TD Ameritrade settled a lawsuit alleging they 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.[14]

TD Ameritrade and the Reserve money funds[edit]

The firm's customers were approached by TD Ameritrade brokers and recommended to invest their liquid money in a money fund managed by The Reserve, RYPQX (the Reserve Yield Plus Class R fund), according to investors in the fund.[15][16][17][18] More than 98% of the fund had been sold to TD Ameritrade's clients, as disclosed in a statement from the Reserve on July 29, 2008.[19][improper synthesis?] When the fund broke the buck along with several other Reserve money funds in September, 2008, money assets of thousands of TD Ameritrade clients (including many senior citizens) were frozen. For the larger Reserve Primary Fund that also broke the buck, TD Ameritrade said it will reimburse clients for up to a 3% loss. Other Reserve funds, such as the Interstate Tax Exempt Fund, were sold by TD Ameritrade, and were caught up in the Primary Fund's Failure, leaving investors in these funds without liquidity. However, the Reserve Yield Plus fund previously marketed by the company is not covered by the offer.[20] [21]

Investors allege a conflict of interest for TD Ameritrade to promote the fund over its clients in the presence of a distribution agreement between The Reserve and TD Ameritrade that earns Ameritrade an undisclosed slice of fee revenue. Fred Tomczyk (TD Ameritrade president) argued that the contract was a standard one and that "an investment firm has to make money in some way."[15] According to the Chicago Tribune article, the distribution agreement clearly was effective: assets in Yield Plus Class R shares sold almost exclusively to TD Ameritrade clients shot from almost nothing in 2006 to $770 million by March of this year, public documents show. Another class dominated by the Omaha firm shot from $2 million to $171 million.

The SEC along with several state regulatory agencies are investigating TD Ameritrade's fund promotion and marketing practices.[22][23] The company is named in a class action lawsuit for misrepresentation and marketing of the Reserve Yield Plus fund as a money market fund.[24] The Sacramento Bee reported that the SEC filed a civil complaint against Reserve Management, chairman Bruce Bent Sr., and vice chairman and president Bruce Bent II in May 2009. It also reported anticipated investor losses of 8.3%, and TD Ameritrade spokeswoman Kim Hillyer said it will cover up to $50 million of losses in the Primary Fund.[25]

As of November 16, 2009, about $85.5 million Yield Plus Fund assets are still being held by the Reserve Management Co., which decided to hold off on distributions to shareholders in order to "set aside money to cover potential claims" against itself.[26]


Competitors include:[27][original research?]

Industry awards and rankings[edit]

TD Ameritrade earned five stars and finished second overall in the 2011 Online Broker Review with the thinkorswim platform taking top honors.[28] In 2012, they earned five stars, a first place finish, and a slew of Best in Class awards along with thinkorswim once again taking top trading platform.[29] For 2013, TD Ameritrade repeated their #1 Overall performance, earning four and a half stars, a first place finish, thinkorswim as top trading platform, and finished first for new investors.[30] In 2014, TD Ameritrade once again won #1 Overall Broker for the third year in a row, receiving a four and a half star rating, and were awarded #1 Desktop Platform for thinkorswim.[31]

See also[edit]


  1. ^ a b "Financial Statements for TD Ameritrade Holding Corp. - Google Finance". Retrieved 15 May 2014. 
  2. ^ "AMTD: Profile for TD AMERITRADE HLDG - Yahoo! Finance". Yahoo. Retrieved 2008-04-26. 
  3. ^ "Stadium gets its name". Omaha World Herald. 2009-06-10. Retrieved 2009-06-10. 
  4. ^ "Welcome to TD Ameritrade Park". Omaha World Herald. 2009-06-09. Retrieved 2009-06-10. 
  5. ^ Business Wire (2009-01-08). "TD AMERITRADE to Acquire thinkorswim". Business Wire. Retrieved 2013-06-27. 
  6. ^ "Welcome!". TD Ameritrade. Retrieved 2008-04-26. 
  7. ^ [1] TD-Ameritrade Fact Sheet
  8. ^ "Login". 
  9. ^ "Who's Trading Your E-mail Addresses?". Slashdot. 2007-05-30. Retrieved 2008-04-26. 
  10. ^ "More on leak of e-mails from Ameritrade". Bill Katz. 2007-05-31. Retrieved 2008-04-26. 
  11. ^ "Elvey v. TD Ameritrade, Inc.". Justia News. Retrieved 2008-04-26. 
  12. ^ "Hackers Infiltrate TD Ameritrade Client Database". The Register. Retrieved 2008-04-26. 
  13. ^
  14. ^ Pepitone, Julianne (2009-07-20). "TD Ameritrade settles auction-rate securities case for $456M". CNN. Retrieved 2010-05-24. 
  15. ^ a b "Fund losses fuel customers' anger; Revenue-sharing deal raises questions of conflict". Retrieved 2013-06-27. 
  16. ^ Money. (2013-07-02). Retrieved on 2013-07-12.
  17. ^ Getting Personal:Reserve Payout Won't Deter Suit, Lawyers Say[dead link]
  18. ^ "Reserve Yield Plus Investors in SEC Plea". 2009-09-12. Retrieved 2013-06-27. 
  19. ^ Statement of Additional Information Reserve Yield Plus Fund of Reserve Short-Term Investment Trust
  20. ^ "Ameritrade to Make Clients Whole on Primary Fund". 2008-09-25. Retrieved 2013-06-27. 
  21. ^ "TD Ameritrade Support for Primary and International Fund holders". Retrieved 2013-06-27. 
  22. ^ Guru, Joe. "TD Ameritrade cons customers into "safe" money funds". Retrieved 2013-06-27. 
  23. ^ "Form 10K: TD AMERITRADE Holding Corporation". Retrieved 2013-06-27. 
  24. ^ "Investors feel burned by what looked like a money market fund". tribunedigital-baltimoresun. 
  25. ^ [2][dead link] Accessed: (Archived by WebCite at
  26. ^ "Reserve to Hold Off On Fund Distributions". 2009-11-16. Retrieved 2013-06-27. 
  27. ^ "FINRA Member Firms: List of Members", Financial Industry Regulatory Authority, Inc. May 11, 2013. Accessed May 11, 2013.
  28. ^ "2011 Online Broker Review", January 18, 2011.
  29. ^ "2012 Online Broker Review", February 21, 2012.
  30. ^ "2013 Online Broker Review", February 19, 2013.
  31. ^ "2014 Online Broker Review", February 18, 2014.

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