TD Ameritrade Lawsuit _SHELDON SILVERSTEIN Vs Td Ameritrade _ Deceptive Marketing and Fraud
Defendants deceptively marketed ARS as cash alternatives to money
market funds for investors needing liquidity and utterly failed to disclose material
information about the ARS they were marketing.
4. Defendants uniformly failed to disclose that ARS are not cash alternatives
to money market funds but are instead complicated financial products based on bonds
having maturities of 30 years and longer. Defendants also failed to disclose that ARS
were only “liquid because certain other broker-dealers created an artificial market for
ARS which would dry up as soon as these broker-dealers decided to remove themselves
from the auction process. Defendants also failed to disclose that during the Class Period
certain broker-dealers purchased ARS for their own accounts to avert auction failures,
and that, but for the interaction of these broker dealers’ intervention a great deal of these
auctions would have failed.
5. Instead of disclosing the true nature of ARS and the substantial liquidity
risks associated with them, Defendants continued to push as many ARS as possible on to
their unsuspecting customers.