Schwab-TD Ameritrade Antitrust Suit Lives On

The Charles Schwab-TD Ameritrade merger may be a done deal, but an antitrust lawsuit brought by investors seeking to unwind the combination remains active in federal court.

Any potential trial would likely be at least two years away.

Filings in U.S. District Court for the Eastern District of Texas show the docket has been modified, with a final pretrial conference now set for Oct. 6, 2025; the court had initially set the conference for Dec. 5, 2024.

Retail investors who sued Schwab in the putative class-action lawsuit contend the 2020 deal substantially weakened competition, harming brokerage clients. They allege they pay higher transaction costs and suffer from diminished consumer choices.

U.S. District Judge Amos Mazzant in February 2023 denied Schwab's motion to dismiss the case, Jonathan Corrente et al. v. The Charles Schwab Corp., writing, "When considering a motion to dismiss … the court must accept as true all well-pleaded facts in the plaintiff's complaint and view those facts in the light most favorable to the plaintiff."

Mazzant found the plaintiffs had stated claims for relief adequate to deny Schwab's request for dismissal.

Among other key dates on the current court schedule, which Mazzant approved in November, the plaintiffs have until April 5 this year to file a motion for certification as a class. Discovery is due by Dec. 12, 2024, and an expert witness list by Jan. 6, 2025, and the parties face a May 23, 2025, mediation deadline.

Several court filings in the case have been sealed or redacted. One reply by Schwab to a particular plaintiff motion, example, "relies on and discloses information that (Schwab) has designated as confidential," according to a motion to file the response under seal.

In a letter that Schwab filed this month, the investment firm requested the court keep under seal portions of the briefing and exhibits filed in connection with a motion from the plaintiffs, "because they disclose non-public, competitively sensitive business information about Schwab."

Last week, the plaintiffs filed a redacted document supporting its request that Schwab produce the Hart-Scott-Rodino (antitrust regulatory) file for the challenged merger, and complaining about the investment giant's refusal to do so.

While Schwab acquired TD Ameritrade in 2020, a year after announcing the transaction, it has taken years to complete the transition; Schwab converted most TD Ameritrade accounts to its own platform in 2023 and has said it expects to finish the process with a very small group early this year.

Lawyers for Schwab and the plaintiffs didn't immediately respond to emails seeking comment on the case status.

"Discovery is ongoing and we continue to prepare for trial," a Schwab spokesperson told ThinkAdvisor by email.

Credit: Chris Nicholls/ALM; Adobe Stock