Laurent J. LaBrie v. TDAmeritrade

Laurent LaBrie takes TD Ameritrade ("TDAmeritrade" or "TDA") to the Maryland Attorney General for misappropriation of $15,174 from a personal individually managed account

Securities Division of the Maryland Attorney General, File #2009-0395

November 7, 2009

Julie L. BelClaire
State of Maryland Office of the Attorney General, Securities Division
200 Saint Paul Place
Baltimore, MD 21202-2020

Re: TD Ameritrade
Your File #2009-0395

Dear Ms. BelClaire

Thank you for your time researching my case and your thoughtful response dated October 21, 2009.

Thank you for confirming the two phone numbers that TDA had on record to call. Those are indeed the two numbers I had at the time, the first one was my office at the University of Maryland Medical Center and the second one is my home. For the first one I present documentation from the UMMC stating that it rolls into voice mail and won't give a busy signal. (See enclosures A&B.) (If you call the UMMC one, you will probably still get my voicemail recording, as it hasn't been changed as of yesterday, despite my having moved to Johns Hopkins over four months ago.) For the second one, I have enclosed my Vonage records proving that nobody called. (See enclosure C.) TDA obviously didn't provide you the third party evidence I have to confirm their impossible assertion. So, if any call was made, TDA misdialed and did not attempt a second time. Thus, they did not make a reasonable effort to contact me at the phone numbers I provided them as the OCC directed them. Since the contract with them states that they follow the OCC guidance, they did not observe their contractual agreement.

Thank you also for the summary of my call to TDA about my UDR options. Although I couldn't recall the conversation verbatim, you confirmed my assertion that they told me that all was normal with the options. Of course, all parties know that this was not the case, but they misinformed me. Since, as we discussed on the telephone, they confirmed that all was normal with the options and nothing adverse was occurring such as the company going bankrupt, the average options investor would have every expectation that those options would be exercised normally. Since this was established on the telephone and no further information was released by the OCC in their memos subsequent to this conversation, there was no need for further instruction to know my intention. The fact that they exercised the options, confirms that they recognized at the time that this was the case. You confirmed in your previous letter that you know that they exercised the options.

TDA's assertion: "the short 800 share position was in book entry form only as the option was not actually exercised. No short position truly existed." This statement is not supported by the transaction records I provided.

Nowhere on the Confirmation Notice do the words "book entry" appear. (See Enclosure F.)

The Confirmation Notice states that the reason that the first trade was replaced with the second one was to "CORRECT PREVIOUS CONFIRM ACCOUNT TYPE...YOU SOLD SHORT" (emphasis theirs).

On the first transaction, they had mistakenly tried to close an open long position in my Margin Account instead of opening a short position in my Short Account. This is evidenced by my Statement of January 2009 where it reads:

Trades Pending Settlement

Investment Description Type Account Symbol/CUSIP Quantity Price Trade Date Settle Date Amount

SELL Margin UDR 800- $ 25.00 01/20/09 03/31/09 $ 19,979.89

CANCEL SELL Margin UDR 800 25.00 01/20/09 03/31/09 (19,979.89)

SELL Short UDR 800- 25.00 01/20/09 03/31/09 19,979.89

(Formatting and emphasis theirs)

Nowhere on my Statements from TDA do the words “book entry” appear. In fact, on my February statement (previously presented), my yet unsettled UDR trades appear right under trades for EIHI and FITB. If the profitable UDR “book entry” was reversed, why wasn't my unprofitable EIHI “book entry”?

Nowhere in my internet account did the words “book entry” designate the UDR position.

This contradicts the message of the President's office of 4/3/09 which we discussed in our two telephone calls.

This contradicts their letter from Corporate Compliance dated 6/11/09 in response to my Better Business Bureau case #300046993. (See Enclosure E.)

As we discussed in our telephone conversation, how can I have had all Transaction Confirmations and two written confirmation from two distinct reviews from separate TDA departments stating that these transactions executed if that is not in fact the case? Now they find it convenient to give you the story that Mr. Bass gave me in the recorded conversation with them on 3/28/09. They have promised quality control but still are trying to produce consistent answers to a basic question, did the trade exercise? All evidence shows that they did.

They confirm that this was a self-directed individual account. In our conversation confirmed by your letter, you stated that you know that these transactions occurred. You also know from the documents provided that the transactions I performed netted TDA $15,000. I'm sure you had the same Series 7 training I do, so you know that using investor funds for corporate gain is wrongful under Exchange Act Rule 15c3-3. (My lawyer told me to use the word "wrongful" in that sentence, but Series 7 training uses the word "fraudulent". See Enclosure D.)

It is my understanding that the Maryland Attorney General is interested in pursuing cases where Maryland taxpayers are defrauded. Although this is not a case involving someone rich and famous, I am a Maryland taxpayer and as a former Army officer, like you I have served the public. At my tax rate, TDA has fraudulently deprived Maryland and Baltimore County of $1000 in tax revenue, so it is probably worth your time to pursue this further with a penalty.

Sincerely,

Laurent J. La Brie

Enclosure A: E-mail and confirmation that my voicemail was activated.

Enclosure B: Instructions for using my voicemail.

Enclosure C: Vonage phone records for December 5, 2008.

Enclosure D: NASD rules on fraudulent use of investor funds.

Enclosure E: Letter from Joseph E. Belek, Corporate Compliance, TD Ameritrade dated June 11, 2009

Enclosure F: Confirmation of UDR short.

See the full case against them presented to the BBB and Attorney General