TD Ameritrade Holding Corp. (AMTD) settled with the SEC on Thursday over charges that the fund failed to reasonably supervise its registered representatives, some of whom misled customers when selling shares of the Reserve Yield Plus Fund, a mutual fund that “broke the buck” in September 2008.
According to the SEC’s order, “TD Ameritrade’s representatives offered and sold the fund through the firm’s various sales channels prior to Sept. 16, 2008. The order finds that a number of the representatives violated the securities laws when they mischaracterized the fund as a money market fund, as safe as cash, or as an investment with guaranteed liquidity. They also failed to disclose the nature or risks of the fund when offering the investment to customers”.
To settle the SEC’s charges, TD Ameritrade agreed to distribute approximately $10 million to eligible customers who continue to hold shares of the fund.