Serial Litigant Sues to Block TD Ameritrade-Schwab Merger
Another TD Ameritrade Holding Corp. shareholder has filed a lawsuit attempting to derail the discount brokerage firm’s acquisition by Charles Schwab Corp.
The complaint asks the court to temporarily and permanently enjoin the merger, rescind it “to the extent already implemented,” order an accounting of all damages Stein suffered and award attorneys’ and expert witness’ fees and litigation costs.
The suit was signed by Delaware lawyers Brian Long and Gina Serra, who also filed a class-action lawsuit last week on similar grounds. Gloria Melwani, a lawyer at plaintiffs’ firm Wolf Haldenstein Adler Freeman & Herz in New York, is of counsel on the Stein lawsuit. Berwyn, Pa. lawyer Richard Maniskas is piloting the class-action lawsuit.
Such suits have become common in proposed mergers, with at least four filed last year—including one from Stein—attempting to halt Advisor Group’s now-completed takeover of Ladenburg Thalmann Financial Services. The lawsuits are often withdrawn after agreements are reached to pay attorneys’ fees and amend disclosure documents, giving rise to their designation in legal circles as “moot suits,” according to a directors-and-officers insurance blog from a lawyer at Ohio-based RT Specialty.
When the Schwab-TD deal was announced on November 25, Schwab said it would exchange 1.0837 of its shares for every TD Ameritrade share. Schwab shares, which were trading at $49.31 at the time, were changing hands on Tuesday afternoon about 38% lower at $30.31, while TD Ameritrade’s were off about 39% at $31.55.
Another suit seeking to block the deal was dismissed in January. It was filed by Franklin Tsung, a registered investment advisor whose father founded a firm that makes customer relationship management software that TD Ameritrade offers to RIAs.
Spokespeople from TD Ameritrade and Schwab said the companies do not comment on pending litigation as a matter of policy.