Charles Schwab has agreed to implement an antitrust compliance program to settle a class-action lawsuit over its TD Ameritrade acquisition, and customers are being notified.
The U.S. District Court for the Eastern District of Texas in February issued a preliminary order approving the settlement between Schwab and brokerage customers who alleged that the Schwab-Ameritrade merger decreased competition among brokers.
The judge in the case, Jonathan Corrente et al. v. The Charles Schwab Corp., also directed that members of the settlement class be issued notifications, a process that is now underway, according to a joint status report filed with the court in early April. More than 25.5 million people were to be notified by email or physical mail, according to the status report.
In December, the parties jointly proposed a settlement of the lawsuit under which Schwab would commit to "certain non-monetary undertakings and payments of plaintiffs’ attorneys’ fees and costs in an amount that would be immaterial," according to Schwab's most recent annual report.
“We have reached a resolution allowing us to move forward without further expenditure of time or resources,” a Schwab spokesperson told ThinkAdvisor in an email Friday. “We remain focused on delivering exceptional service and an outstanding experience to our clients, which is our highest priority.”
Class members have until July 29 to object to the settlement in writing and may include a request for court permission to speak at an Aug. 28 fairness hearing in Texas, according to the settlement website. The plaintiffs have until July 17 to submit a motion for final approval.
Schwab and the plaintiffs agreed to jointly retain an independent consultant at Schwab’s expense to design an antitrust compliance program that Schwab will implement, according to a court document.
The proposed class includes people and entities who are current Schwab U.S. brokerage customers, including those who previously held accounts at TD Ameritrade.
The plaintiffs believe that the antitrust compliance program will provide tangible benefits to class members and future Schwab customers by further ensuring price improvement on trades and transparency regarding order routing, which would provide information that could be used to select broker-dealers, the settlement document states.
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