Class-Action Lawsuit Soon To Be Settled By TD Ameritrade

The largest online broker service, TD Ameritrade Holding Corp. is about to resolve a class-action lawsuit in connection of online pilfering of contact data of over 6 Million clients who received stock spam, as reported by Associated Press on June 19, 2008.

Under a proposed settlement, Ameritrade agreed to spend almost $1.9 Million to cover legal charges along with annual anti-spam service charges for targeted customers. Ameritrade also assured to safeguard client information more effectively.

But, the terms of this settlement could be altered if Vaughn Walker, US District Judge, San Francisco, turned down the purported settlement to know more about the legal fees and the benefits Ameritrade's clients would get.

Matthew Elvey, a San Francisco resident, was among the petitioners who had filed a lawsuit against TD Ameritrade in May 2007, alleging that he had begun to receive stock spam (advertisements for cheap stocks frequently employed in "pump-and-dump schemes") in November 2006 shortly after the theft of customer data from Omaha online brokerage, as reported by SWIOWA NEWS on June 19, 2008.

But TD Ameritrade made the security breaches public in September 2007, soon after the filing of suits by petitioners. The firm claimed that although names, contact addresses, and telephone numbers of 6.3 Million clients were stolen, there is no proof of personal details like birth dates, Social Security numbers, and account numbers, being compromised.

Explaining the temporary settlement of lawsuit, Kim Hillyer, Ameritrade's Spokesperson, said that they believe that the settlement is fair, reasonable and it will provides lots of advantages to people to tackle this issue that surfaced because of spam, as reported by Associated Press on June 19, 2008.

Kim Hillyer further said that Ameritrade proposes to provide detailed information about junk e-mails, advertising stock, on its homepage. The Omaha-based firm also promised to give $55,000 to two groups fighting against junk e-mail and has also decided to engage a security company to check its defense against cyber-terrorists at least bi-annually till December 2009.

Related article: Click Fraud in Q3 Rises for Industry, Including Yahoo! & Google

» SPAMfighter News - 7/4/2008