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Case Status:    DISMISSED    
On or around 08/31/2004 (Date of order of final judgment)

Filing Date: October 10, 2003

On July 19, 2004, the Court issued the Memorandum and Order denying the certification of a plaintiff class, and directed the plaintiff to file an Amended Complaint by August 20, 2004. The plaintiff did not filed an Amended Complaint, and the defendants instead filed two renewed motions to dismiss. On August 31, 2004, U.S. District Judge Joseph F. Bataillon issued the Memorandum and Order granting both motions to dismiss, and, in accordance with the Memorandum and Order, the Court issued Judgment dismissing the plaintiff’s complaint.

The complaint charges Ameritrade, Knight and certain key officers and directors with mutiple violations of SEC Rules 3b, 10b and 11Ac. Ameritrade violated Rule 11Ac in that they failed to disclose to their customers their true affiliation with Knight, the true level of customer order flow routed to Knightfor execution and the true payments for order flow received from Knight. Knight violated Rules 11Ac regarding order handling and display in connection with the orders placed via Ameritrade's customers. Both companies filed false historical data in required SEC filings and reports. All defendants violated Rules 10b and 3a in a scheme to defraud Ameritrade's customers through improper order execution by not properly revealing the true affiliation shared between the parties as complained of in this action.

The complaint further alleges that approximately 70 percent of all customers' orders were routed to Knight for execution during the 8 1/2 year Class Period. This resulted in improper order handling and execution of nearly 40,000 trades per day on all securities on all major exchanges. The amount defrauded of the 3 million plus Class members in this action resulted in losses of billions of dollars of investment capital. The lawsuit seeks $4.5 billion in restitution, or $1500 per member. Ameritrade failed their fiduciary responsibility to disclose the affiliation shared with Knight to their customers, the regulatory agencies and the investing public. Ameritrade's ownership position of Knight common stock, revenues received for payment for order flow and past equity income gains from Roundtable Partners LLC obligates Ameritrade to properly disclose all levels of this affiliation to the public. By not disclosing this affiliation, and Knight's willful violations of SEC Rules, as sanctioned by the SEC and the NASD, the Class Members have sustained the damages complained of herein.

NOTE: This securities class action lawsuit was brought on behalf of all who became a customer of Ameritrade between March 29, 1995 and September 30, 2003, and were victim to their orders placed via Ameritrade and Knight not receiving the execution deserved, and sustained financial losses thereby.


Sector: Financial
Industry: Investment Services
Headquarters: United States


Ticker Symbol: N/A
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Nebraska
DOCKET #: 03-CV-421
JUDGE: Hon. Thomas M. Shanahan
DATE FILED: 10/10/2003
CLASS PERIOD END: 09/30/2003
  1. Plaintiff with Power of Attorney, Denton L. Keener
No Document Title Filing Date
—Reference Complaint Complaint Related Data is not available
—Related District Court Filings Data is not available