Online Broker to Pay More Than $160,000 for Misleading Massachusetts Investors in Mutual Fund Promotion
TD Ameritrade Failed to Supervise Representatives in Sale of Reserve Yield Plus Fund
BOSTON – An online broker of financial products has agreed to pay more than $160,000 after its representatives misled Massachusetts investors, Attorney General Maura Healey announced today.
In an assurance of discontinuance, filed in Suffolk Superior Court, AG Healey alleged that representatives of Omaha-based TD Ameritrade, Inc. (TDA) deceived investors by wrongfully claiming that its Reserve Yield Plus Fund was a money market mutual fund. Representatives described the investment as “safe as cash” and as an investment with guaranteed liquidity. However, in reality, the fund possessed neither of those characteristics, and when it lost value during the financial crisis, its investors lost liquidity and value in their investments.
Under the terms of today’s settlement, TDA has agreed to make whole certain Massachusetts investors whom the Attorney General alleged were misled by the TDA representatives. Payments to the investors will exceed $100,000. TDA will also make a $60,000 payment to the state.
This agreement follows a similar settlement by the Securities and Exchange Commission, which required TDA to distribute 0.012 per share of the fund to eligible customers.
This case was handled by Deputy Division Chief Monica Brookman, with assistance from Michael Beaulieu and Legal Analyst Emily Garvey, all of Attorney General Maura Healey’s Insurance and Financial Services Division.