TD Ameritrade Inc. said it might contribute $20 million and its insurers will pay $12 million of the total $220 million settlement amount to settle a class-action suit regarding the sale of securities, if ever the court gives its approval.
Various lawsuits were filed against the company over the alleged unlawful sale of Aequitas Commercial Finance LLC securities. The plaintiffs alleged, among other things, that material misstatements and omissions were made and that the company served as the custodian for the securities. In addition, they also claimed the company referred investors to financial advisers to market the securities.
Some non-class action suits were dismissed by the judge, siding with the company's position that arbitration is the proper venue. TD Ameritrade eventually settled all non-class action suits for an amount paid by its insurers.
The magistrate judge on July 15 issued a recommendation to the district judge to preliminarily approve the class settlements. A settlement hearing is scheduled Nov. 26.