TD Ameritrade Inc. was hit with an $8 million arbitration claim by a group of options traders who say they lost money last summer during the final integration of the thinkorswim trading platform. All of the traders were original thinkorswim clients who traded on a margin-account platform that was reserved for the most experienced and active options traders, according to the claim.  TD Ameritrade bought thinkorswim Inc. in 2009, primarily for its options-trading technology. In their Statement of Claim filed December 2011, 2 investment funds and 5 individuals, claim that, during the market drop in August 2011, TD Ameritrade's option-trading system would not accept trades which would have reduced the traders' risk.  The firm then sold out the positions to meet margin calls, which compounded their losses.   They are asking for $8.2 million in damages.

“My clients were not able to get through to [TD Ameritrade] in a timely manner,” and place trades via phone or chat. -- Daxton White, The White Law Group LLC.

Integration Process. As part of the integration in August, TD Ameritrade brought thinkorswim's clearing in house, from Penson Worldwide.  Mr. White said he doesn't know what caused the glitch, “but that's exactly when it happened.”  In response to reports of the glitch, the company said the problem arose when 250,000 clients were moved to TD Ameritrade, which forced them to place orders by phone. TD Ameritrade has promoted its options-trading capability to its independent RIA clients as well as to individual investors. [Investment News, 1/10/12]