TD Ameritrade, a FINRA registered broker-dealer since 1979, is based in Bellevue, NE.   Recently, TDA agreed to settle FINRA charges that the firm violated MSRB Rule G-17 on 16 municipal securities transactions. FINRA Findings and Allegations. From 1/1/09 through 3/31/09, in connection with those purchases of municipal securities, TDA allegedly failed to disclose complete information to customers - i.e., negative ratings changes related to the municipal bonds at or before the time of purchase.  Failure to provide complete information to customers at or before the purchase of the municipal bonds is a violation of MSRB Rule G-17.

Rule G-17, Conduct of Municipal Securities and Municipal Advisory Activities. In the conduct of its municipal securities or municipal advisory activities, each broker, dealer, municipal securities dealer, and municipal advisor shall deal fairly with all persons and shall not engage in any deceptive, dishonest, or unfair practice.

TD Ameritrade agreed to pay a $40K fine. For further details, go to:   [AWC #2009019594803, December 2011]

[C-I Notes: FINRA published a rather short AWC, without a lot of details.  We'd be interested in understanding how FINRA came upon these violations.  For example, the following sceanrio might be quite likely:

MSRB notified FINRA that the bond rating on certain municipal bonds dropped, whereupon FINRA and/or MSRB identifies those firms that reported purchase transactions in the subject securities.  This information might be obtained through the MSRB's RTRS reporting system.

At that point, FINRA contacts those broker-dealers that reported purchases for customers, and requested them to provide copies of all documentation and correspondence - hard copies and/or electronic versions, including trade confirmations - that were sent to customers pertaining to the subject purchases.  materials sent visit the firm's offices ither inquires of the broker if anything was sent out to customers at or prior to the purchase.

In many ways, it's similar to police officers and traffic cops who, at the beginning of each month, check the inspection and registration stickers for all parked cars in a neightborhood.]