Switch to TDAmeritrade and Contribute to Corporate Governance (CorpGov.net) at No Cost to You

TDAmeritrade is running a promotional where they pay current customers $50 to refer new customers. I feel like a high school kid knocking on doors selling candy so that I can go on a class trip to Washington but it really does take money to keep up this website and to report on various corporate governance events around the country. A few $50 “donations” would really help and switching to TDAmeritrade should work out for you… better than buying a box of candy.

If you switch to TDAmeritrade and want them to contribute to our efforts, e-mail me (James McRitchie) and provide your first name, last name, and your e-mail address. I’ll send that along to TDAmeritrade, they’ll send you an e-mail invitation and when you sign up I’ll get the $50.

TD Ameritrade, Inc. (“TD Ameritrade”), was been named “Best for Novices” and “Best for Long-term Investing” by Barron’s 2013 online broker survey, published in its Mar. 9, 2013 issue.

The annual study surveyed the capabilities of 24 online brokers in eight categories from the perspective of the wealthy, active trader: Trading Experience & Technology, Usability, Mobile, Range of Offerings, Research Amenities, Portfolio Analysis & Reports, Customer Service & Education, and Costs. TD Ameritrade received an overall rating of 4 stars (out of a possible 5 stars) and received the highest point total in the Research Amenities, Range of Offerings and Customer Service & Education categories.

The broker was also named one of the top five best in three other sub-categories: Best for Frequent Traders, Best for In-Person Service and Best for Options Traders.

“Investors today come in all shapes and sizes, whether you’re just starting out or an experienced trader, and we cover the whole gamut very well,” said Steve Quirk, senior vice president of TD Ameritrade’s Trader Group. “We’re not just interested in providing our clients with innovative, cutting edge technology. All of our offerings are coupled with comprehensive education and best-in-class service as well. We want our clients to be successful in every stage of their financial journey. While we’re never satisfied, these results show that we’re working extremely hard for our clients and that our offering has broad appeal for today’s investors.”

These accolades are just the latest in a series of third-party acknowledgements for TD Ameritrade’s offerings in 2013. In recent months Investor’s Business Daily named TD Ameritrade’s thinkorwim(R) platform “Best Options Trading Platform” and “Best Mobile Platform,” and Stockbrokers.com named TD Ameritrade the #1 overall broker. More information on these and other accolades.

Below is what  I posted back on June 27, 2012, before the United States Proxy Exchange (USPX) suspended operations. It explains why switching to TDAmeritrade might be a good idea for you, especially if you want to file shareowner proposals.

Much of the discussion is now irrelevant, after issuance of the latest Staff Legal Bulletin No. 14G (CF), which address the issues of what is needed to evidence stock ownership for the purpose of filing a shareowner proposal and use of websites in shareowner proposals. However, the main point remains, TDAmeritrade was the best broker to work with on obtaining broker letters. I did end up consolidating my accounts to TDAmeritrade and did buy a small amount of stock in the company (AMTD).

Best Broker For Obtaining Rule 14a-8 Letters: TDAmeritrade

I’ve decided to consolidate my accounts to TDAmeritrade, although I haven’t completed the process so please let me know if you think I’m making a mistake. I am an investor, not a trader, so the trading fees don’t matter much to me. My biggest concern is getting broker letters. However, only four firms were evaluated, so others may be better.

Staff issued Staff Legal Bulletin No. 14F (SLB 14F) on 10/8/2011 reversing an earlier Staff position on proof of ownership issues that arise when proponents use an “introducing broker.” At the time, I called it the “Stop Chevedden Bulletin,” since John is one of the only shareowner activists I know whose broker doesn’t have its own clearing through the Depository Trust Company (DTC).SLB 14F stated that if a retail shareowners broker wasn’t a direct participant with the DTC they would have to get a second letter from the broker’s clearinghouse bank to verify the broker actually held the shares they said they held in the broker letter they provided to their client.

As far as I’m concerned, the bulletin was ridiculous, since no broker could provide such a letter to a client who didn’t own the stock without committing fraud. If they did, they would soon be out of business. It was a clear case of SEC staff kowtowing to groups that would like to do away with shareowner proposals altogether. However it wasn’t clear to me from SLB 14F if staff would require a second letter from the broker’s clearing bank if the bank was under the same corporate umbrella or not, although that appeared likely.

On February 29, 2012, with a letter denying Merck a no-action exclusion it became clear that a single broker letter that also spoke on behalf of a related affiliate clearing bank would suffice. See also Omnicom letter of 2/22/2012 regarding departments within a corporation and Vornado Realty Trust, 3/28/2012 regarding divisions within a corporation.

I started a group at the United States Proxy Exchange (USPX) back at the beginning of the year to assess which brokers could best help us weather the potential storm created by SLB 14F that turned out to be more of a mild sprinkle, accompanied by a lot of thunder, for most of us.

Like many of the larger online brokers, TDAmeritrade has their own clearing bank. Early on in the year, before the above cited letters denying no-action relief to companies, I took every precaution and obtained two letters from TDAmeritrade. It took about six back and forth letters in pdf format through their their secure messaging system but we finally got it down. My template is available to USPX members, along with lots of other helpful advice for activists.

TDAmeritrade was generally able to get back to me with a pdf response within 3 or 4 days and would time it to arrive in the morning, facilitating my ability to put it together with the proposal, submitting a single complete package.

Scottrade would only send hardcopy through the mail. That doesn’t work if you want to include the broker letter with the proposal and give the firm only one bite at the apple when seeking a no-action letter from the SEC. I’m very fortunate that I have a Scottrade office about 2 miles away from my home, so I could pick them up in the morning and package up a complete proposal. Still, it is less convenient than TDAmeritrade where everything can be done electronically. Scottrade seems locked into the Pony Express-era. Great if you’re into antiques.

E*Trade won’t send broker letters via pdf. They will FAX them, if they can figure out what you are asking for. I had many back and forth e-mails and conversations with them before they caught on. I’ve got a multifunctional printer but during the last couple of years I think I’ve only used it to receive letter from E*Trade.

Generally, I’d much rather scan documents into pdf if I need to. Most of the time, I just generate a pdf from a Word document. I like to be able to easily read and handle my documents, so FAXes don’t work for me. That’s 20th century technology. I wonder if E*Trade is also using pagers and floppy disks.

Another USPX member posted his experience with Fidelity to the USPX group. Essentially, he was unable to obtain a letter until he got the name of someone at Fidelity who had done it before from another USPX member. The power of networking with other USPX members is great but I don’t want to have to rely on one individual at Fidelity who may decide to move elsewhere.

In conclusion, I plan to consolidate my brokerage accounts to TDAmeritrade within the next month or so and may even buy stock in the company. They are considerably better at issuing broker letters; maybe they are better with other services as well.

Disclaimer: I am an individual investor, not a licensed investment advisor or broker dealer. Investors are cautioned to perform their own due diligence.  All views expressed herein are my own and do not constitute a recommendation to buy or sell. Never make any investment without conducting your own research and reading multiple points of view.

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