TDAmeritrade is one of America’s #1 stock investment companies, they’ve been around for over 30 years and have a absolutely amazing reputation with traders.
However, there are some down sides to dealing with tdameritrade, and some concerns that you need to consider when dealing with them.
They’ve been known for their extremely funny commercials like this one:
Here’s a excerpt from their wiki page : TD Ameritrade’s lawsuit spawned from its involvement within the auction rate security scandal. Ameritrade sales individuals actively promoted Nuveen’s auction rate securities as an alternative to dollars funds, resulting in people inability to liquidate out of their securities.
An auction rate security is really a kind of closed-end fund which indicates the fund has a fixed initial investment and is then traded on a secondary marketplace. The cash was to be invested in municipal securities along with other instruments at rates that would be determined by weekly auctions. TD Ameritrade salespeople promoted Nuveen funds with names like “Quality Preferred Income II” to corporate and individual investors, claiming they had been liquid alternatives to funds marketplace funds. In reality they had been not, due to the fact they had no expiration date along with the issuer has no obligation to pay back dollars it has borrowed from the investor, who can only money out by selling his investment to an individual else.
The marketplace for auction rate securities collapsed in February, 2008 when broker-dealers like UBS declined to continue to participate in dutch auctions that determined the rate of interest for the securities. Up to this point, brokers and issuers had propped up the auctions by acting as a bidder of last resort; with out their participation, the marketplace swiftly folded. Investors had been left with “frozen” accounts, that essentially had been worth nothing, since they could not be redeemed and also the investment houses that produced them refused to close them out or return the dollars.
Now, the question exists about TDameritrade – Are they the best company to use when purchasing stocks and mutual funds?
Ameritrade is one of the nation’s premiere stock brokerages, along the likes of Etrade and Zulutrade are also great firms to work with.