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Saturday, June 6, 2009

Class action against Ameritrade potentially involving identity theft

I am a plaintiff and didn't even know it. I received a class action settlement notice in the mail yesterday regarding a class action filed in the Northern District of California, San Francisco division (odd how I've never been in the San Francisco area but they have personal jurisdiction over me in a case that I didn't even know I was involved in filed by attorneys I do not know much less hire, but I digress). The suit alleges that an authorized third party obtained Ameritrade's e-mail addresses of its stock holders and then used them to send spam and possibly commit identity theft. The complaint seeks monetary and injunctive relief.

Unfortunately, the class action lawyers forgot that they were supposed to be seeking monetary awards for their clients (me included) too. Instead, the proposed settlement includes a one year, free subscription to an anti-spam Internet security software product, a warning on Ameritrade's website concerning stock touting spam (shouldn't the lawsuit itself have prompted such a warning?!), an independent consultant to conduct additional analysis as to whether the personal information of any class action member has been subject to "organized misuse" including identity theft (like people who have their identities stolen really want to allow another third party to sift through their personal information?) and general customer support about the "benefits" of the settlement (so one of my benefits is to get to ask questions about the other stuff I don't want but am getting?).

This has to be the lamest class action settlement I have ever seen. Congrats to Ameritrade's lawyers on snowing the class action attorneys so bad. Usually the class's attorneys' names would appear on the notice of settlement, but not this time. I wouldn't want my name associated with such a terrible outcome either.

There is hope though. Class members such as me can either opt out by July 9 or the settlement could be found to be unfair at the fairness hearing on September 10. Why I have to opt out before I know whether the settlement is going to be approved seems a bit unfair. What happens if I opt out and then the Court finds that the settlement is not fair and orders the parties to try again and, this time, class action attorneys actually do their job and secure a fair settlement with some value to it for the actual members of the class, not just their counsel that they didn't get to choose themselves?

I, for one, am going to opt out. But I hope that someone challenges this settlement on behalf of the class.

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