TD Ameritrade Holding Corp. is cooperating with an ongoing investigation by three state attorneys general of possibly collusive conduct by retail securities brokers, according to a release issued by the office of Connecticut attorney general George Jepsen.
The investigation by Mr. Jepsen and the two attorneys general from Missouri and Iowa, was launched last summer, shortly after a joint venture between
NASDAQ OMX Corporate Solutions and Loyal3 Holding Inc. was terminated. The two firms had announced a venture on June 2 that would give retail investors the ability to purchase Nasdaq listed shares directly from companies without commissions and without the assistance of a traditional retail broker. The partnership was dissolved within weeks, prompting the probe by the states.
NASDAQ OMX spokeswoman Alexandra Honeysett did not return a call seeking comment.
The investigation is focused on possible collusion by retail brokers “which may have been designed to thwart the entry of a new competitor into the online retail brokerage industry,” the office of Mr. Jepsen said in an emailed response to questions. Mr. Jepsen is a co-chair of the Antitrust Committee for the National Association of Attorneys General.
Mr. Jepsen's office said that neither Nasdaq nor Loyal 3 were being investigated and that it could not reveal the subjects of an ongoing investigation.
TD Ameritrade, originally part of the probe, agreed to cooperate with investigators and to implement an anti-
trust compliance policy and training program “for all TD Ameritrade employees who interact with competitors or wholesale market makers, (including order execution firms), in the retail brokerage industry,” per a letter from Mr. Jepsen to TD Ameritrade General Cousel Ellen Koplow. The firm will voluntarily produce all documents “reasonably requested” by the states pertaining to the investigation. A similar agreement was reached with Scottrade Inc. in March.
Kim Hillyer, a spokeswoman for TD Ameritrade, confirmed the agreement with the three attorney generals. “We haven't been accused of doing anything wrong and we'll continue to help in the investigation if asked to do so,” she said.
