TD Ameritrade Settles With SEC For $10 Million

The SEC announced a settlement with TD Ameritrade, the online brokerage firm, for $10 million for failing to properly supervise advisors who misled investors about the safety of reserve Management Corporation’s Yield Plus Fund, one of the funds that “broke the buck” in 2008. The fund which owned commercial paper issued by Lehman Brothers “broke the buck” when the value of its assets fell below the $1 per share net asset value, causing millions of dollars in losses for TD Ameritrade customers.

When the product was marketed to investors, the representatives pitched the fund as being as safe as cash, according to the release. They also described the fund as a money market fund insured by the FDIC. Julie Lutz, the associate director of the Denver SEC office, said, “TD Ameritrade failed to establish the policies and procedures necessary to reasonably supervise its employees and prevent these misrepresentations to investors.”

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