Ameritrade settlement one step closer to approval

Six million customers and former customers of Ameritrade (of which I am one) will unfortuantely have to wait a little while longer to learn if the proposed settlement regarding the theft of their personal information will be approved.  A hearing was held before U.S. District Judge Vaughn Walker in San Francisco on Thursday.  Judge Walker, who gave preliminary approval to the settlement way back in May, took the issue under advisement and will issue his ruling at a later date.  No indication as to how much later that date is going to be.

Anyone who either provided an e-mail address to Ameritrade or held an account there before September 14, 2007 will be able to benefit from the settlement.  Unfortunately, even if the settlement is approved, that doesn't mean much to you, me and the rest of the 6 million affected.  The settlement will pay nearly $1.9 million to the attorneys for legal fees.  I have little problem with the amount of attorneys' fees, except for the fact that the plaintiffs will get zip, nada, nothing in the way of cash.  The plaintiffs will receive one year of anti-spam software.  Woop-tee-doo.  Does anyone else think the plaintiffs should at least get enough to buy a happy meal?! 

While I realize the whole point of class actions is stop many little wrongs that, taken alone, are not worth the cost of correcting, but c'mon, the attorneys get $1.9 million and the plaintiffs don't get $.01?  Doesn't sound fair to me.  I have never handled a class action but I know and have worked with attorneys who have.  A tremendous amount of work goes into handling any litigation, but especially a class action.  But still ... shouldn't the injured parties get SOME kind of financial consideration?  I would suspect that most of the 6 million already have anti spam or, if they don't, its because they don't care to have anti-spam software.  So the offer is pretty much worth $0 to most of the 6 million, or so I would suspect.  Pretty crappy, if you ask me.

I have settled cases in the past where I ended up with more than my client, but its usually because I sunk a lot of my own cash into expenses in the case that I was not guaranteed to get back.  When the case settled, I got my percentage plus reimbursement of my expenses, which in some case nets me more of the final settlement but only because I have put my money at risk rather than my client's.  But I have never settled a case where my client got nothing in the way of compensation.  And I hope I never will.

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.