TD Ameritrade Faces Class Action Lawsuit After Acquisition Bungled Tax Considerations

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TD Ameritrade Scottrade Securities Class Action Lawsuit Overview:

• What: The class action alleges the brokerage firm Scottrade issued substitute payments to investors in place of dividends. 
• Who: TD Ameritrade
• Where: The class action lawsuit was filed in TKTK federal court.

A Missouri federal judge granted class certification in a class action lawsuit filed against TD Ameritrade. The complaint concerns the brokerage firm Scottrade, owned by TD Ameritrade, which allegedly issued substitute payments to investors instead of dividends, thus depriving the investors of a lower tax bracket. 

The approved class covers Scottrade customers who received a substitute payment in lieu of qualified dividends from Jan. 23, 2010 to Feb. 26, 2018. This is a change from the original proposed class of customers who “received a substitute payment… in lieu of dividends,” which TD Ameritrade argued would have included customers who did not receive non-qualified dividends which would not have resulted in the same injury loss claimed. 

The lead plaintiff is Annette Bartle, who maintains that Scottrade loaned securities in her account in order to initiate short sales. This triggered substitute payments instead of dividend payments she claims she was owed, resulting in a bigger income tax bite than she should have faced. 

Bartle and the class action lawsuit accuse TD Ameritrade of breach of contract and unjust enrichment. 

Have you ever invested with Scottrade? Did you face bigger tax hits due to their investments? Tell us about it in the comments below

The plaintiff is represented by Jared Rose of the Law Office of Jared A. Rose. 

The TD Ameritrade Scottrade Securities Class Action Lawsuit is Bartle v. TD Ameritrade Holdings Corp., Case No. 4:20-cv-00166, in the U.S. District Court for the Western District of Missouri Western Division. 

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