TD Ameritrade

TD Ameritrade Holding Corporation
Public
Traded as
Industry Financial services
Founded 1971 (1971)
Headquarters Omaha, Nebraska, U.S.
Key people
 Tim Hockey, CEO
Joe Moglia, Chairman
J. Joseph Ricketts, Founder
Steve Boyle, CFO[1]
Services Brokerage firm
Revenue Increase $3.676 billion (FY 2017)[1]
Decrease $1.466 billion (FY 2017)[1]
Increase $872 million (FY 2017)[1]
Total assets Increase $38.627 billion (FY 2017)[1]
Total equity Increase $7.247 billion (FY 2017)[1]
Owner Toronto-Dominion Bank (42%)[1]
Number of employees
 8,800[1]
Website www.amtd.com
www.tdameritrade.com

TD Ameritrade is a brokerage firm based in Omaha, Nebraska with a major trading center in St Louis, Missouri.[2] The letters TD are derived from Toronto-Dominion Bank, the largest shareholder. The company provides services for individuals and institutions that are investing online. The company offers an electronic trading platform for the purchase and sale of financial securities including common stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed income investments. It also provides margin lending, and cash management services.

Current operations

As of September 30, 2017, Ameritrade had 11,004,000 funded customer accounts and client assets of $1.118 trillion.[1] In fiscal year 2017, the company executed an average of 510,710 client transactions per day.

In fiscal year 2017, the company derived 37.6% of its revenues from commissions and fees including fees for order flow, 30.1% of its revenues from Toronto-Dominion Bank for investment of idle cash balances, 18.8% of revenues from interest, 11.5% from investment product fees, and 2.0% from other sources.[1]

History

In 1975, the Securities and Exchange Commission banned the practice of fixed brokerage commissions and J. Joseph Ricketts and three partners opened First Omaha Securities, Inc. in Omaha, Nebraska.[3]

In 1983, Ameritrade Clearing Inc. was established as a Central counterparty clearing broker.[3]

In 1988, the company introduced the first quote and order entry system via the touch-tone phone.[3]

In 1995, the company acquired K. Aufhauser & Company, Inc., the first firm to offer online securities trading.[3]

In January 1996, TransTerra's Accutrade launched "Accutrade for Windows," which led to a surge in investing online.[4]

In September 1996, TransTerra merged with Ameritrade.[5]

In March 1997, Ameritrade became a public company via an initial public offering.[3]

In February 2001, Ameritrade acquired TradeCast, which had approximately 60 broker/dealer, hedge fund and money management customers, for $67.3 million.[6][7]

In July 2001, Ameritrade acquired National Discount Brokers for $154 million, adding $6.3 billion in client assets.[8][9]

In September 2002, Ameritrade acquired Datek Online Holdings Corporation.[10][11]

In June 2003, Ameritrade acquired Mydiscountbroker.com.[12]

In 2004, Ameritrade acquired Bidwell and Company in January,[13] BrokerageAmerica in February,[14] and JB Oxford and Company in October.[15]

In January 2006, Ameritrade Holding Corporation acquired the United States brokerage business branded as TD Waterhouse from Toronto-Dominion Bank. The business was renamed TD Ameritrade.[16][17]

In February 2008, the company acquired accounts from Fiserv.[18]

In May 2008, CEO Joe Moglia announced he would be vacating the CEO position and would become Chairman. Fredric Tomczyk, the former COO, was named his successor.[19][20]

In January 2009, TD Ameritrade acquired Thinkorswim, a producer of software for active traders, in a cash and stock deal valued at approximately $606 million.[21]

In 2013, the company opened a new $250 million headquarters in Omaha.[22]

In September 2017, the company acquired Scottrade, based in St Louis, Missouri, making St Louis the second largest hub for TD Ameritrade.[23][24] The transition of client accounts occurred in February 2018.[25]

In April 2018, TD Ameritrade and Havas placed an ad inserted within the bitcoin blockchain.[26]

Security breaches

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.[27] 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.[28] The settlement was criticized for netting the attorneys almost as much money as the victims.[29]

Auction rate securities scandal

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.[30][31][32]

Customer losses in reserve money funds

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 on the dollar in addition to compensation from TD Ameritrade.[33][34][35][36][37][38][39][40][41]

Sponsorships

The company owns the naming rights to TD Ameritrade Park Omaha for which it pays an average of $1 million a year.[42]

See also

References

  1. 1 2 3 4 5 6 7 8 9 10 "TD Ameritrade Holding Corporation 2017 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. ↑ Brown, Lisa. "TD Ameritrade closes on purchase of Scottrade, up to 1,000 job cuts planned". stltoday.com. Retrieved 2018-05-14.
  3. 1 2 3 4 5 "Timeline: Milestones in TD Ameritrade history". Omaha World-Herald. October 31, 2016.
  4. ↑ Kamen, Ken (September 2, 2010). Reclaim Your Nest Egg: Take Control of Your Financial Future. John Wiley & Sons.
  5. ↑ AMERITRADE HOLDING CORPORATION Form S-1 JANUARY 21, 1997
  6. ↑ "AMERITRADE, IN ACQUISITION, SEEKS INSTITUTIONAL CLIENTS". The New York Times. Bloomberg News. February 15, 2001.
  7. ↑ "Ameritrade buys TradeCast". CNNMoney. February 14, 2001.
  8. ↑ "Ameritrade in deal to buy NDB.com". Chicago Tribune. August 1, 2001.
  9. ↑ "AMERITRADE WILL BUY NATIONAL DISCOUNT BROKERS". The New York Times. Reuters. August 1, 2001.
  10. ↑ Sorkin, Andrew Ross (April 8, 2002). "Ameritrade In Deal to Buy Online Rival Datek". The New York Times.
  11. ↑ Craig, Susanne (April 8, 2002). "Ameritrade Agrees to Buy Datek In $1.29 Billion Stock Agreement". The Wall Street Journal. (subscription required)
  12. ↑ "Ameritrade Closes on Mydiscountbroker.com Account Acquisition" (PDF) (Press release). Business Wire. June 16, 2003.
  13. ↑ "Ameritrade to buy Bidwell & Co". American City Business Journals. November 7, 2003.
  14. ↑ "Ameritrade to Acquire Accounts from BrokerageAmerica" (Press release). Business Wire. October 2, 2003.
  15. ↑ "JB Oxford & Company Completes Sale of Retail Accounts to Ameritrade, Inc" (Press release). PRNewswire. October 12, 2004.
  16. ↑ Ian, Austen (June 23, 2005). "TD Waterhouse USA Is Sold to Ameritrade". The New York Times.
  17. ↑ "Ameritrade Closes TD Waterhouse Acquisition". NBC News. Associated Press. January 25, 2006.
  18. ↑ "Sale of Fiserv unit to TD Ameritrade closes". American City Business Journals. February 4, 2008.
  19. ↑ "TD Ameritrade names COO Fred Tomczyk as next CEO". Fox News. Associated Press. May 15, 2008.
  20. ↑ "TD Ameritrade COO named next CEO". The Globe and Mail. Bloomberg News. May 16, 2008.
  21. ↑ "TD AMERITRADE to Acquire thinkorswim" (Press release). Business Wire. January 8, 2009.
  22. ↑ Hubbard, Russell (July 31, 2013). "TD Ameritrade shows off its new $250 million headquarters". Omaha World-Herald.
  23. ↑ "TD Ameritrade Closes Acquisition of Scottrade Financial Services, Inc" (Press release). Business Wire. September 18, 2017.
  24. ↑ Edwards, Greg (September 18, 2017). "TD Ameritrade closes on acquisition of Scottrade". American City Business Journals.
  25. ↑ "TD Ameritrade Completes Scottrade Account Conversion". TD Ameritrade Holding Corporation. February 28, 2018. Retrieved 12 March 2018.
  26. ↑ "TD Ameritrade and Havas Placed an Ad on the Blockchain". Retrieved 2018-05-14.
  27. ↑ "TD Ameritrade's six million customers hit with security breach". CNET. November 26, 2007.
  28. ↑ Carolina Bolado (September 13, 2011). "TD Ameritrade Settles Data Breach Suit For Up To $6.5M". Law360.
  29. ↑ Kravets, David (July 11, 2008). "Ameritrade Hack Settlement: $2 Per Victim, $1.8 Million for Lawyers". Wired.
  30. ↑ Pepitone, Julianne (July 20, 2009). "TD Ameritrade settles auction-rate securities case for $456M". CNNMoney.
  31. ↑ "SEC Charges TD Ameritrade for Auction Rate Securities Sales Practices" (Press release). U.S. Securities and Exchange Commission. July 20, 2009.
  32. ↑ "TD Ameritrade Agrees To Auction-Rate Buyback". The New York Times. Associated Press. July 20, 2009.
  33. ↑ HOLZER, JESSICA; MAXEY, DAISY (February 4, 2011). "TD Ameritrade Settles SEC Case Over Reserve Fund". The Wall Street Journal. (subscription required)
  34. ↑ Oneal, Michael (November 2, 2008). "Fund losses fuel customers' anger; Revenue-sharing deal raises questions of conflict". Chicago Tribune.
  35. ↑ MAXEY, DAISY (September 12, 2009). "Reserve Yield Plus Investors in SEC Plea". The Wall Street Journal. (subscription required)
  36. ↑ ANAND, SHEFALI; SCANNELL, KARA (September 25, 2008). "Ameritrade to Make Clients Whole on Primary Fund". The Wall Street Journal. (subscription required)
  37. ↑ AMBROSE, EILEEN (December 16, 2008). "Investors feel burned by what looked like a money market fund". The Baltimore Sun.
  38. ↑ "Investors in fallen money fund Reserve Yield Plus can't access cash". New York Daily News. Associated Press. October 3, 2008.
  39. ↑ "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.
  40. ↑ "TD Ameritrade investors in Reserve money fund could share settlement". USA Today. Associated Press. February 3, 2011.
  41. ↑ "FEDERAL COURT APPROVES FINAL DISTRIBUTION OF ASSETS" (PDF) (Press release). Reserve Funds. April 11, 2016.
  42. ↑ "TD Ameritrade Inks Naming-Rights Deal For CWS Ballpark In Omaha". Advance Publications. June 9, 2009.
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