EX-10.3






Exhibit 10.3




COMMONWEALTH OF PENNSYLVANIA



BEFORE THE



PENNSYLVANIA SECURITIES COMMISSION




	 	 	 	 	 
	 

IN THE MATTER OF

	 	:
	 	 
	 

	 	:	 	 
	TD Ameritrade, Inc.

	 	:
	 	ADMINISTRATIVE PROCEEDING
	 

	 	:
	 	Docket No. 2008-05-06
	 

	 	:	 	 
	 

	 	:	 	 
	RESPONDENT          

	 	:	 	 
	 


	 	 	 	 






OFFER OF SETTLEMENT




SECTION I




     TD Ameritrade, Inc. (Respondent) submits this Offer of Settlement (Offer) to the Pennsylvania
Securities Commission (Commission) solely for the purpose of settling allegations of the staff of
the Commission and without any adjudication of said allegations that Respondent violated a certain
provision of the Pennsylvania Securities Act of 1972 (1972 Act) in connection with the offer and
sale of auction rate securities (ARS) in the Commonwealth of Pennsylvania and in the following
states and territories within the United States of America: Alabama, Alaska, Arizona, Arkansas,
California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,
North Dakota, North Carolina, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina,
South Dakota, Tennessee, Texas, US Virgin Islands, Utah, Vermont, Virginia, Washington, West
Virginia, Wisconsin, and Wyoming.



 









 





SECTION II





	A.	 	Respondent admits the jurisdiction of the Commission and the regulatory authorities of the
aforementioned states and territories over it and over the subject matter of this Offer.
	 
	B.	 	Respondent waives hearing and rehearing, including that provided by Section 607 of the 1972
Act; 70 P.S. § 1-607.
	 
	C.	 	Respondent waives any and all review by a court of law, including that provided by Section
607(d) of the 1972 Act; 70 P.S. § 1-607(d).
	 
	D.	 	Respondent, without admitting or denying the allegations therein, consents to the issuance of
the appended Findings of Fact, Conclusions of Law, and Order (Order) which are incorporated
herein by reference.
	 
	E.	 	Respondent consents to participate in a special arbitration (Arbitration) for the exclusive
purpose of arbitrating any Eligible Investor’s consequential damages claim arising from their
inability to sell Eligible Auction Rate Securities.1






	 	1.	 	Respondent will notify Eligible Investors of the Arbitration process under
the following terms:






	 	a.	 	The Arbitration will be conducted by a single public
arbitrator (as defined by Section 12100(u) of the FINRA Code of Arbitration
Procedures for Customer Disputes);







 




			
	1	 	The terms “Eligible Investor” and “Eligible Auction
Rate Securities” are defined terms in the Order for Pennsylvania Securities
Commission Docket 2008-05-06 and they shall be given the same meaning in this
Offer.




2









 











	 	b.	 	Respondent will pay all applicable forum and filing fees.
Eligible Investors may seek recovery for their attorneys’ fees to the same
extent that they may under standard arbitration procedures;
	 
	 	c.	 	Any Eligible Investor who chooses to pursue such claims in
the Arbitration shall bear the burden of proving that they suffered
consequential damages and that such damages were caused by their inability to
access funds invested in Eligible Auction Rate Securities;
	 
	 	d.	 	In the Arbitration, Respondent shall be able to defend itself
against such claims, provided, however, that Respondent shall not contest
liability for the illiquidity of the underlying ARS or use as part of its
defense any decision by an Eligible Investor not to borrow money from
Respondent;
	 
	 	e.	 	All customers, including but not limited to Eligible
Investors who avail themselves of the relief provided pursuant to this Order,
may pursue any remedies against Respondent available under the law. However,
Eligible Investors that elect to utilize the Arbitration process set forth
above are limited to the remedies available in that process and may not bring
or pursue a claim relating to Eligible Auction Rate Securities in another
forum.
	 
	 	f.	 	All terms used but not defined herein shall have the meaning
assigned to them by the 1972 Act.




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SECTION III




          Respondent states that no promises of any kind or nature whatsoever were made to induce it to
make this Offer, and that this Offer is a voluntary act on their part.



SECTION IV




          If this Offer is acceptable to the Commission, the provisions of the Offer shall become
effective as of the date of the issuance of the appended proposed Order. If the Offer is not
acceptable to the Commission, the Offer shall be deemed withdrawn without prejudice to the
Respondent.



	 	 	 	 	 	 	 
	 

	 	 	 	     TD Ameritrade, Inc.	 	 
	 
	 	 	 	 	 	 
	     Date: July 9, 2009

	 	BY:
	 	/s/ WILLIAM J. GERBER
 

	 	 
	 
	 	 	 	 	 	 
	 	 	TITLE: Executive Vice President, Chief Financial Officer
	 
	 	 	 	 	 	 





	 	 	 	 	 	 	 	 	 
	     Date:

	 	 	 	BY:	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 

	 	 	 	TITLE:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 






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ACKNOWLEDGMENT




     Before me, the undersigned authority, personally appeared William J. Gerber, an executive
officer of TD Ameritrade, Inc., known or proved to me to be the person who executed the foregoing
Offer of Settlement, and acknowledged that he/she executed the same freely and voluntarily and for
the purposes stated therein.



	 	 	 	 	 
	 	 	 
	 	                                                          /s/ NANCY LOWREY
 	 
	 	Notary Public 	 
	 
	 	My commission expires:





May 4, 2012 	 



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