Saturday, June 27, 2009

Ameritrade Stock Spam Settlement

In 2007, plaintiffs brought a class action lawsuit against Ameritrade, alleging that Ameritrade was somehow behind the plaintiffs' receiving spam pushing the purchase of certain stocks--because, after all, there is no other way that anyone receives spam.

In 2008, the parties settled, with $1.87M for the attorneys, and zero pecuniary benefits to the 6.2-million-member class other than coupons for anti-virus software. Unfortunately for the attorneys,
at the preliminary approval hearing, Matthew Elvey, one of the class representatives, came forward and expressed numerous “reservations” about the settlement. He suggested that the gains the class would receive under the settlement had the appearance of benefitting the class but were, in operation, trivial.
This is understatement: Elvey told the court that he opposed the settlement, and even filed papers to that effect. Judge Vaughn Walker therefore declined preliminary approval--but then a few months later approved a similar settlement that had some minor changes such as the expiration date of the coupons and the wording of the notice.

To date, there is no evidence that the spam was connected to Ameritrade, or that a breach of Ameritrade data security that released home addresses for its customers has resulted in any harm, despite Ameritrade seeding databases with dummy spam-catcher e-mail addresses, and multiple analyses of whether identity theft had occurred.

Objections to this settlement are due July 9, 2009, with a September 10 hearing date in the Bay Area. And wouldn't you know it, I am a class member, though I must have thrown my densely written notice in the trash.

(Case No. C 07-2852 VRW (N.D. Cal.)).


  1. Ted,
    Could you post examples of class actions that you approve of -- or are you fundamentally opposed to the principle of class actions?

  2. I am a member of this class. This kind of suit is the epitome of what is wrong with our legal system. What can I do to help stop it?

  3. Bfayette, contact me, and we can discuss.

  4. Public CItizen represents Elvey in his objections to the settlement. You can read the first iteration here:

    The Texas AG also filed objections in the first round:

  5. Your SOCIAL SECURITY NUMBER was compromised, and you've stuck your head in the sand!

    "No evidence," you say. Wow. Wow. Wow. It would be difficult to come up with a claim for which the available evidence was stronger than the evidence supporting the claim that the 'spam was connected to Ameritrade'. The evidence for the existence of water on Earth is not materially stronger. You might want to actually read the complaint: , or (both of which are in the case docket) or the links Deepak added.

    -Matthew Elvey (yes, the one who filed the case!)

    Oh, and TD Ameritrade has ADMITTED there was a breach; see particularly the record types compromised list, and the primary sources section.