Regulators Settle Auction Rate Securities Claims Against TD Ameritrade
According to a July 20, 2009 article in the Wall Street Journal, TD Ameritrade Inc. agreed to buy back $456 million of auction rate securities from its clients as part of a settlement with NY Attorney General Andrew Cuomo, the SEC, and Pennsylvania regulators. Investors around the country, including individuals, charities, nonprofit entities and businesses will be entitled to monetary returns. TD Ameritrade said it may need until June 30, 2010 to complete the buybacks.
Over the past year, Wall Street firms and brokerage houses have agreed to buy back over $60 billion of auction rate securities from investors. Thousands of investors bought auction rate securities in reliance on representations that they were as safe and as liquid as cash, only to discover that they could not sell the securities when brokerage firms stopped supporting the securities in early 2008, leaving investors with billions in losses.
TD Ameritrade will repurchase securities bought before Feb. 13, 2008 that are still held by customers and will also reimburse eligible investors who sold their securities at a discount after the market failed. TD Ameritrade also consented to a special arbitration process to resolve claims of damages suffered by eligible investors as a result of being unable to access their funds.
This settlement comes on the heels of an announcement by Attorney General Cuomo warning Charles Schwab & Co that it plans to sue the company for civil fraud if it does not quickly reach an agreement to buy back auction rate securities from its clients. Schwab claims Mr. Cuomo’s allegations are without merit.
Page Perry, LLC is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing investors in auction rate securities cases. For further information, please contact us.
