IN THIS ISSUE
Eighth Circuit Overturns Class Certification in Suit Against TD Ameritrade Holding Corp., Holding Individualized Evidence is Required for Each Putative Class Member; District Judge Approves Magistrate’s Recommendation to Deny Dismissal of Putative Securities Class Action and Expressly Declines to Overrule Ninth Circuit Precedent Supporting Private Parties’ Right of Action Under Section 14(e); Northern District of Illinois Allows Securities Class Action to Proceed Against Exelon Over Bribery Scheme; Ninth Circuit Affirms Dismissal With Prejudice of Putative Securities Class Action Against Gigamon.
EIGHTH CIRCUIT OVERTURNS CLASS CERTIFICATION IN SUIT AGAINST TD AMERITRADE HOLDING CORP., HOLDING INDIVIDUALIZED EVIDENCE IS REQUIRED FOR EACH PUTATIVE CLASS MEMBER
On April 23, 2021, in
Ford v. TD Ameritrade Holding Corp.,
1 a panel of the U.S. Court of Appeals for the Eighth Circuit reversed a district court order certifying a class action alleging that TD Ameritrade committed securities fraud by failing to comply with the duty of best execution in executing customer orders. The decision deals a blow to securities class actions based on violations of a broker’s best execution obligation and highlights the difficulties investors face in certifying securities fraud claims outside a typical disclosure-based stock-drop case.
Background
The duty of best execution requires a broker-dealer to seek for its customer’s trade orders “the most favorable terms reasonably available under the circumstances.”
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Securities Litigation Update: Eighth Circuit Closes the Door on Securities Class Action Alleging Violation of Broker’s Duty of Best Execution, Highlighting Class Certification Challenges in Atypical Fraud Cases Friday, April 30, 2021
Ford v. TD Ameritrade Holding Corp.,
1 a panel of the U.S. Court of Appeals for the Eighth Circuit reversed a district court order certifying a class action alleging that TD Ameritrade committed securities fraud by failing to comply with the duty of best execution in executing customer orders. The decision deals a blow to securities class actions based on violations of a broker’s best execution obligation and highlights the difficulties investors face in certifying securities fraud claims outside a typical disclosure-based stock-drop case.