TD Ameritrade substitute payments $2.3M class action lawsuit settlement

TD Ameritrade Holding Corp. has agreed to pay more than $2.3 million to settle a nationwide class action lawsuit alleging Scottrade breached its contract with account holders by providing substitute payments instead of dividends without compensating for a potential difference in tax treatment.

Scottrade brokerage account holders who received a substitute payment in lieu of a dividend between Jan. 23, 2010, and Feb. 26, 2018, may be entitled to compensation from the TD Ameritrade class action settlement.

TD Ameritrade acquired Scottrade in 2017.

The Scottrade class action lawsuit alleges Scottrade failed to meet its obligations set forth in its Brokerage Account Agreement with account holders who received substitute payments instead of qualified dividends in their brokerage accounts.

Substitute payments are reportedly subject to ordinary income tax rates while dividends are not. Therefore, the Scottrade class action lawsuit alleges account holders who were provided substitute payments suffered a financial loss because the substitute payments are subject to less favorable tax treatment than qualified dividends.

Under the terms of the Brokerage Account Agreement, account holders who were provided with substitute payments should be compensated for the differing tax treatment, the TD Ameritrade class action lawsuit asserts.

TD Ameritrade denies the allegations but agreed to pay $2.325 million to settle the class action lawsuit.

Payments will automatically be sent to eligible class members who do not exclude themselves from the TD Ameritrade settlement. Settlement payments are expected to be 5.28% of any substitute payment in lieu of dividend class members received from Scottrade from Jan. 23, 2010, to Feb. 26, 2018.

Class members who wish to exclude themselves from or object to the TD Ameritrade settlement must do so no later than July 22, 2022.

The final approval hearing will be held Aug. 5, 2022.

There is no claim form for the TD Ameritrade settlement. Eligible class members who do not exclude themselves from the settlement will automatically be sent payments.

Who’s Eligible

Scottrade brokerage account holders who received a substitute payment in lieu of a dividend between Jan. 23, 2010, and Feb. 26, 2018, may be entitled to compensation from the TD Ameritrade class action settlement.

Potential Award

Varies

Proof of Purchase

No proof of purchase applicable

Objection and Exclusion Deadline

07/22/2022

Case Name

Annette Bartle v TD Ameritrade Holdings Corp Settlement, Case No.: 20-00166-CV-W-BP, in the U.S. District Court for the Western District of Missouri Western Division

Final Hearing

08/25/2022

Settlement Website

BartleSettlement.com

Claims Administrator

Bartle v TD Ameritrade Holdings Corp
Settlement Administrator – 7607
PO Box 2637
Faribault, MN 55021-9637
833-539-2847

Class Counsel

Jared Rose
THE LAW OFFICE OF JARED A ROSE

Defense Counsel

Stephen G Topetzes
Theodore L Kornobis
K&L GATES LLP

Jason M Hans
Catherin A Singer
GM LAW PC