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
Public
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 IncreaseUS$3.247 billion (FY 2015)[1]
IncreaseUS$$1.325 billion (FY 2015)[1]
IncreaseUS$$813 million (FY 2015)[1]
Total assets IncreaseUS$$26.375 billion (FY 2015)[1]
Total equity IncreaseUS$$4.903 billion (FY 2015)[1]
Number of employees
5,700 [2]
Website www.amtd.com
www.tdameritrade.com

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, exchange-traded funds, option trades, mutual funds, fixed income, margin lending, and cash management services. As of September 30, 2015, Ameritrade had 6,621,000 funded customer accounts and client assets of $667.4 billion.[1]

History[edit]

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.[3]

Acquisitions[edit]

In August 1999, Accutrade (then a division of Ameritrade) acquired The R.J. Forbes Group, Inc. 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 Mydiscountbroker.com 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. [4]

In 2005, Ameritrade Holding Corporation acquired TD Waterhouse USA from TD Bank Financial Group and changed its name to TD Ameritrade[5].

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.[6]

Controversies[edit]

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

In October 2005, several people posting to nanae (the news.admin.net-abuse.email Usenet newsgroup) began to uncover what was at the time the third largest dataloss incident ever[7] 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.[8] There was speculation that one of TD Ameritrade's affiliated companies was the source of the leaks.[9]

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.[10][11] TD Ameritrade has stated that the stolen information included account information such as account balances.[12]

Auction Rate Securities Scandal[edit]

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.[13]

Reserve money funds[edit]

TD Ameritrade brokers recommended to its customers to invest their liquid money in a money fund managed by The Reserve. During the financial crisis of 2008, this fund "broke the buck" and traded as low as 97 cents on the dollar. TD Ameritrade earned fee revenue from the fund, which was considered a conflict of interest. The company agreed to reimburse most of investors' losses via a settlement. [14]

Sponsorships[edit]

The company owns the naming rights to TD Ameritrade Park Omaha for which it pays an average of $1 million a year.[15]

Competitors[edit]

Competitors include:[16][original research?]

Industry awards and rankings[edit]

TD Ameritrade earned five stars and finished second overall in the StockBrokers.com 2011 Online Broker Review with the thinkorswim platform taking top honors.[17] 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.[18] 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.[19] 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.[20]

See also[edit]

References[edit]

  1. ^ a b c d e f "TD Ameritrade Reports Record 2015 Earnings; Seventh Consecutive Year of Double-Digit Asset Gathering". October 27, 2015. 
  2. ^ TD Ameritrade: By the Numbers
  3. ^ TD Ameritrade: About Us
  4. ^ Company History
  5. ^ "Ameritrade to Acquire TD Waterhouse U.S.A". TD Ameritrade. June 22, 2005. 
  6. ^ Business Wire (2009-01-08). "TD AMERITRADE to Acquire thinkorswim". Business Wire. Retrieved 2013-06-27. 
  7. ^ "Login". datalossdb.org. 
  8. ^ "Who's Trading Your E-mail Addresses?". SlashDot.com. Slashdot. 2007-05-30. Retrieved 2008-04-26. 
  9. ^ "More on leak of e-mails from Ameritrade". Bill Katz. 2007-05-31. Retrieved 2008-04-26. 
  10. ^ "Elvey v. TD Ameritrade, Inc.". Justia.com. Justia News. Retrieved 2008-04-26. 
  11. ^ "Hackers Infiltrate TD Ameritrade Client Database". The Register. Retrieved 2008-04-26. 
  12. ^ http://datalossdb.org/primary_sources/0000/0187/NH_Ameritrade.pdf
  13. ^ Pepitone, Julianne (July 20, 2009). "TD Ameritrade settles auction-rate securities case for $456M". CNN. 
  14. ^ SEC Charges TD Ameritrade for Failing to Supervise Its Representatives Who Sold Shares of the Reserve Yield Plus Fund
  15. ^ "The Omaha Baseball Stadium Becomes TD AMERITRADE Park Omaha". TD Ameritrade. June 10, 2009. 
  16. ^ "FINRA Member Firms: List of Members", Financial Industry Regulatory Authority, Inc. May 11, 2013. Accessed May 11, 2013.
  17. ^ "2011 Online Broker Review", January 18, 2011.
  18. ^ "2012 Online Broker Review", February 21, 2012.
  19. ^ "2013 Online Broker Review", February 19, 2013.
  20. ^ "2014 Online Broker Review", February 18, 2014.

External links[edit]