Pennsylvania regulators have filed a civil lawsuit against TD Ameritrade
alleging that the company defrauded investors in the sale of its Reserve
Yield Plus Fund by misrepresenting the cash-enhanced
mutual fund as a money-market fund, according to an August 9 WSJ blog article by Daisy Maxey.
The Pennsylvania Securities Commission's enforcement division alleges
that the firms'
misrepresentations regarding the fund were recorded.
The complaint also alleges that TD Ameritrade and Amerivest Investment
Management LLC, both subsidiaries of TD Ameritrade Holding Corp, continued
to sell the fund as a money-market fund even after receiving information
from senior management that indicated the fund's net asset value would
likely dip below $1 per share, which is the level most money-market funds
strive to maintain.
The Reserve Yield Plus Fund once held $1.2 billion in assets, according
to Maxey's article. Approximately $39.7 million remains, which has
been set aside by the fund's trustees to pay potential claims and fees.