Ameritrade cuts fraud deal, focus shifts to Schwab
NEW YORK’S attorney general, who is probing illegal marketing and sales of auction rate securities, said yesterday he intends to charge US brokerage Charles Schwab with civil fraud and has reached a settlement with rival TD Ameritrade.
Schwab denied the allegations calling them “without merit.”
But TD Ameritrade agreed to return $456m (£276m) to investors holding auction rate securities (ARS), which was a market that froze early last year.
New York Attorney General Andrew Cuomo said: “Today’s notice should send a signal that if Charles Schwab will not stand by its customers, this office will.”
The TD Ameritrade settlement brings to about a dozen the number of brokerages and other firms that have agreed to buy back more than $61bn in ARS from investors, said Cuomo, calling it “the single largest consumer recovery in history.”