TD Ameritrade

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TD Ameritrade Holding Corporation
TypeSubsidiary
IndustryFinancial services
Founded1971; 50 years ago (1971) (as Ameritrade)
HeadquartersWestlake, Texas, U.S.
Key people
Joe Ricketts (Founder)
Steve Boyle (Interim President and CEO)
ServicesStockbroker
Electronic trading platform
RevenueDecrease $4.358 billion (Q3 2020)
Decrease $1.930 billion (Q3 2020)
Decrease $1.393 billion (Q3 2020)
AUMIncrease $1.3 trillion (2020) [1]
Total assetsIncrease $54.394 billion (Half 2020)
Total equityIncrease $9.568 billion (Q3 2020)
Number of employees
8,939 (2020)
ParentCharles Schwab Corporation
SubsidiariesThinkorswim, Thinktech
Websitewww.tdameritrade.com
Footnotes / references
[2]
The company's former corporate headquarters, in Omaha, Nebraska

TD Ameritrade is a broker that offers an electronic trading platform for the trade of financial assets including common stocks, preferred stocks, futures contracts, exchange-traded funds, forex, options, cryptocurrency, mutual funds, fixed income investments, margin lending, and cash management services.[3] The company receives revenue from interest income on margin balances, commissions for order execution, and payment for order flow. The company is a subsidiary of Charles Schwab Corporation and its services and accounts will be integrated with those of Schwab by 2023. Its operations are in the process of being moved to Schwab's headquarters in Westlake, Texas.

The company was founded as Ameritrade in 1971. In 2006, it acquired the U.S. operations of TD Waterhouse from Toronto-Dominion Bank and was renamed TD Ameritrade. It was acquired by Charles Schwab Corporation in 2020.

History[edit]

In 1975, the Securities and Exchange Commission banned the practice of fixed brokerage commissions and Joe Ricketts and three partners opened First Omaha Securities, Inc. in Omaha, Nebraska.[4]

In 1983, Ameritrade Clearing Inc. was established as a central counterparty clearing broker.[4]

In 1988, the company introduced the first quote and order entry system via the push-button telephone.[4]

In 1995, the company acquired K. Aufhauser & Company, Inc., the first firm to offer an electronic trading platform.[4]

In January 1996, TransTerra's Accutrade launched "Accutrade for Windows", an electronic trading platform.[5][6]

In September 1996, the company merged with TransTerra.[7]

In March 1997, the company became a public company via an initial public offering.[8]

In February 2001, the company acquired TradeCast, which had approximately 60 broker-dealer, hedge fund and money management customers, for $67.3 million.[9][10]

In July 2001, the company acquired National Discount Brokers for $154 million, adding $6.3 billion in client assets.[11][12]

In September 2002, the company acquired Datek.[13][14]

In June 2003, the company acquired MyDiscountBroker.com.[15]

In 2004, the company acquired Bidwell in January,[16] BrokerageAmerica in February,[17] and JB Oxford and Company in October.[18]

In January 2006, the company acquired the United States brokerage business branded as TD Waterhouse from Toronto-Dominion Bank. The newly combined company was renamed TD Ameritrade, with the Toronto-Dominion Bank owning 40%.[19][20]

In February 2008, the company acquired accounts from Fiserv.[21]

In May 2008, CEO Joe Moglia announced he would be vacating the CEO position and would become Chairman. He was succeeded as CEO by COO Fredric Tomczyk, who was formerly Vice Chair of Corporate Operations at Toronto-Dominion Bank.[22][23]

In January 2009, the company acquired Thinkorswim, a producer of software for active traders, for $606 million in cash and stock.[24]

In 2013, the company opened a new $250 million headquarters in Omaha.[25]

In 2016, Tomczyk retired as CEO and succeeded by Tim Hockey, who had previously headed the TD Canada Trust retail banking division of Toronto-Dominion Bank.[26]

In September 2017, the company acquired Scottrade, based in St Louis, Missouri, making St. Louis the second-largest hub for the company.[27][28] The transition of client accounts occurred in February 2018.[29][30]

In April 2018, TD Ameritrade and Havas placed the first advertisement inserted within the bitcoin blockchain.[31]

In July 2019, CEO Tim Hockey announced his departure from TD Ameritrade in early Q1 2020.[32][33]

In October 2019, TD Ameritrade reduced most online trades to being commission free.[34]

In July 2020, Joe Moglia retired from his role as Chairman of the Board of TD Ameritrade.

On October 6, 2020, Charles Schwab Corporation acquired the company.[35][36]

On January 28, 2021, the company and other trading platforms restricted the trade of certain heavily shorted stocks such as GameStop, BlackBerry, AMC, Koss Corporation, and Nokia.[37]

Legal actions[edit]

Security breaches[edit]

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.[38][39] 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.[40] The settlement was criticized for netting the attorneys almost as much money as the victims.[41] In 2020, customer login information was being sold on the dark web.[42]

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.[43][44][45]

Customer losses in reserve money funds[edit]

The company 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. The company received commissions from the fund for steering customers. In September 2008, during the financial crisis of 2007–2008, as a result of its holdings in securities of Lehman Brothers, the fund was forced to break the buck and $1 billion in cash equivalents of TD Ameritrade clients were frozen. 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 investment. Fredric Tomczyk, President of the company, argued that the contract with the Reserve Fund was a standard contract and that "an investment firm has to make money in some way." 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.[46][47][48][49][50][51][52][53][54]

Sponsorships[edit]

The company owns the naming rights to TD Ameritrade Park Omaha, for which it pays an average of $1 million a year.[55]

References[edit]

  1. ^ "Robinhood Revenue and Usage Statistics (2021)". 25 August 2020.
  2. ^ "TD Ameritrade Holding Corporation FY 2018 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  3. ^ "Online Trading Platforms & Tools". TD Ameritrade. Retrieved 2020-01-09.
  4. ^ a b c d "Timeline: Milestones in TD Ameritrade history". Omaha World-Herald. October 31, 2016.
  5. ^ Kamen, Ken (September 2, 2010). Reclaim Your Nest Egg: Take Control of Your Financial Future. John Wiley & Sons. ISBN 9781118004159.
  6. ^ 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.
  7. ^ "AMERITRADE HOLDING CORPORATION Form S-1". NASDAQ. January 21, 1997.
  8. ^ George Soros. "Soros Fund Management Llc - 13F Holdings". fintel.io. Retrieved 16 April 2020.
  9. ^ "Company News; ameritrade, in acquisition, seeks institutional clientsS". The New York Times. Bloomberg News. February 15, 2001.
  10. ^ "Ameritrade buys TradeCast". CNN. February 14, 2001.
  11. ^ "Ameritrade in deal to buy NDB.com". Chicago Tribune. August 1, 2001.
  12. ^ "Ameritrade will buy national discount brokers". The New York Times. Reuters. August 1, 2001.
  13. ^ Sorkin, Andrew Ross (April 8, 2002). "Ameritrade In Deal to Buy Online Rival Datek". The New York Times.
  14. ^ Craig, Susanne (April 8, 2002). "Ameritrade Agrees to Buy Datek In $1.29 Billion Stock Agreement". The Wall Street Journal.
  15. ^ "SWS sells Mydiscountbroker accounts for $4.2M". American City Business Journals. June 16, 2003.
  16. ^ "Ameritrade to buy Bidwell & Co". American City Business Journals. November 7, 2003.
  17. ^ "Ameritrade to acquire BrokerageAmerica retail accounts". Finextra Research. 2003-10-03. Retrieved 2021-07-16.
  18. ^ "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.
  19. ^ Ian, Austen (June 23, 2005). "TD Waterhouse USA Is Sold to Ameritrade". The New York Times.
  20. ^ "Ameritrade Closes TD Waterhouse Acquisition". NBC News. Associated Press. January 25, 2006.
  21. ^ "Sale of Fiserv unit to TD Ameritrade closes". American City Business Journals. February 4, 2008.
  22. ^ "TD Ameritrade names COO Fred Tomczyk as next CEO". Fox News. Associated Press. May 15, 2008.
  23. ^ "TD Ameritrade COO named next CEO". The Globe and Mail. Bloomberg News. May 16, 2008.
  24. ^ Stempel, Jonathan Spicer, Jonathan (2009-01-08). "TD Ameritrade buying thinkorswim for $606 million". Reuters. Retrieved 2021-07-16.
  25. ^ Hubbard, Russell (July 31, 2013). "TD Ameritrade shows off its new $250 million headquarters". Omaha World-Herald.
  26. ^ King, Rita Trichur And Carolyn (2015-11-10). "TD Bank Shakes Up Top Ranks, Tim Hockey Departs for Ameritrade". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-07-16.
  27. ^ Edwards, Greg (September 18, 2017). "TD Ameritrade closes on acquisition of Scottrade". American City Business Journals.
  28. ^ Bray, Chad (2016-10-24). "TD Ameritrade to Buy Scottrade in $4 Billion Deal". The New York Times. ISSN 0362-4331. Retrieved 2021-07-16.
  29. ^ Brown, Lisa (September 18, 2017). "TD Ameritrade closes on purchase of Scottrade, up to 1,000 job cuts planned". St. Louis Post-Dispatch.
  30. ^ Barr, Diana (2016-10-24). "Scottrade being sold to TD Ameritrade". www.bizjournals.com. Retrieved 2021-07-16.
  31. ^ Swant, Marty (April 26, 2018). "TD Ameritrade and Havas Placed an Ad on the Blockchain". AdWeek.
  32. ^ Matthews, Jessica (2019-07-22). "TD Ameritrade CEO to exit amid disagreement with board". Financial Planning. Retrieved 2021-07-16.
  33. ^ Beilfuss, Lisa (2019-07-22). "TD Ameritrade Begins Search for New CEO". Wall Street Journal. ISSN 0099-9660. Retrieved 2021-07-16.
  34. ^ Wheeler, Jonathan (2019-10-08). "TD Ameritrade In A $0 Commission World". Seeking Alpha. Retrieved 2019-10-10.
  35. ^ Baguios, John (October 6, 2020). "Charles Schwab completes acquisition of TD Ameritrade". S&P Global.
  36. ^ "Charles Schwab completes its $26B purchase of TD Ameritrade". Associated Press. October 6, 2020.
  37. ^ Gonzalez, Oscar; Priest, David. "Robinhood, TD Ameritrade restrict trading of GameStop, AMC stock". CNET. Retrieved 28 January 2021.
  38. ^ "TD Ameritrade Hacked; Customer Info Stolen". CNBC. Associated Press. September 14, 2007.
  39. ^ "TD Ameritrade's six million customers hit with security breach". CNET. November 26, 2007.
  40. ^ Bolado, Carolina (September 13, 2011). "TD Ameritrade Settles Data Breach Suit For Up To $6.5M". Law360.
  41. ^ Kravets, David (July 11, 2008). "Ameritrade Hack Settlement: $2 Per Victim, $1.8 Million for Lawyers". Wired.
  42. ^ Rooney, Kate; Khorram, Yasmin (October 14, 2020). "Hackers look to buy brokerage log-ins on the dark web with Robinhood fetching highest prices". CNBC.
  43. ^ Pepitone, Julianne (July 20, 2009). "TD Ameritrade settles auction-rate securities case for $456M". CNN.
  44. ^ "SEC Charges TD Ameritrade for Auction Rate Securities Sales Practices" (Press release). U.S. Securities and Exchange Commission. July 20, 2009.
  45. ^ "TD Ameritrade Agrees To Auction-Rate Buyback". The New York Times. Associated Press. July 20, 2009.
  46. ^ HOLZER, JESSICA; MAXEY, DAISY (February 4, 2011). "TD Ameritrade Settles SEC Case Over Reserve Fund". The Wall Street Journal.
  47. ^ Oneal, Michael (November 2, 2008). "Fund losses fuel customers' anger; Revenue-sharing deal raises questions of conflict". Chicago Tribune.
  48. ^ MAXEY, DAISY (September 12, 2009). "Reserve Yield Plus Investors in SEC Plea". The Wall Street Journal.
  49. ^ ANAND, SHEFALI; SCANNELL, KARA (September 25, 2008). "Ameritrade to Make Clients Whole on Primary Fund". The Wall Street Journal.
  50. ^ AMBROSE, EILEEN (December 16, 2008). "Investors feel burned by what looked like a money market fund". The Baltimore Sun.
  51. ^ "Investors in fallen money fund Reserve Yield Plus can't access cash". New York Daily News. Associated Press. October 3, 2008.
  52. ^ "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.
  53. ^ "TD Ameritrade investors in Reserve money fund could share settlement". USA Today. Associated Press. February 3, 2011.
  54. ^ "FEDERAL COURT APPROVES FINAL DISTRIBUTION OF ASSETS" (PDF) (Press release). Reserve Funds. April 11, 2016.
  55. ^ "TD Ameritrade Inks Naming-Rights Deal For CWS Ballpark In Omaha". Advance Publications. June 9, 2009.

External links[edit]