1

IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JOHN LINDSTROM, individually and on 

behalf of others similarly situated,

 

 Plaintiff,

 

 v.

TD AMERITRADE, INC., and

TD AMERITRADE FUTURES &

FOREX, LLC d/b/a THINKORSWIM,

 Defendants.

)

)

)

)

)

)

)

)

)

)

)

)

 

 No. 20 C 4028

 Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Before the Court is Defendants TD Ameritrade, Inc. (“TDA”) and TD Ameritrade Futures 

& Forex, LLC dba thinkorswim (“TDAFF”) (collectively, “Defendants”) Motion to Dismiss 

Plaintiff John Lindstrom’s Third Amended Complaint (Dkt. 73). For the reasons given herein, the 

Motion is granted and the Third Amended Complaint is dismissed with prejudice. 

BACKGROUND

The following factual allegations come from Lindstrom’s Third Amended Complaint (Dkt. 

71, “TAC”) and the Court assumes their truth for purposes of this Motion. See W. Bend Mut. Ins. 

Co. v. Schumacher, 844 F.3d 670, 675 (7th Cir. 2016). The Court assumes familiarity with its 

prior opinions in this case, that lay out many of the same facts alleged in the present TAC. See 

Lindstrom v. TD Ameritrade, Inc., No. 20 C 4028, 2020 WL 7398792 (N.D. Ill. Dec. 17, 2020); 

see also Dkt. 62.

Lindstrom held a brokerage account with Defendant TDAFF and a securities account with 

Defendant TDA. (TAC ¶25-27). To open these accounts, Lindstrom had to enter into a Futures 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 1 of 12 PageID #:832
2

Client Agreement. (Id.) On April 20, 2020, Lindstrom owned crude oil futures positions. (Id.

¶31). These futures contracts are traded on the Chicago Mercantile Exchange (“CME”). (Id.) 

On April 20, 2020, up against warnings from CME that oil prices could go negative (as a 

result of market volatility related to the COVID-19 pandemic), TDAFF did not liquidate positions 

or communicate this possibility to its customers. (Id. ¶36). TDAFF took no action to limit the 

losses of investors when crude oil futures fell into the negatives. (TAC ¶56.) TDAFF did not, for 

example, liquidate Lindstrom's positions as soon as they fell into the negatives; instead, TDAFF 

allowed those positions to remain open as they plummeted further and further into negative 

territory. (Id.) TDAFF also did not contact its clients when the market hit zero to give them the 

option of exiting, modifying, or offsetting their positions by placing an order. (Id. ¶41.) Nor did 

TDAFF ever alert its clients prior to April 20th that the futures contracts could fall into the 

negatives. (Id. ¶¶38, 53.) 

On April 20, 2020, Lindstrom believed he had deposited enough money to meet the margin 

call and maintain the crude oil contracts, but the positions were not closed out when the price 

became negative and his account did not contain enough cash to maintain the positions. (Id. ¶¶54-

55). TDAFF permitted the position to remain in the account after the account was under-margined, 

and the untimely forced liquidation of Lindstrom’s positions resulted in a $66,390 loss. (Id. ¶¶55-

56).

A different plaintiff, Wei Wang, filed an initial complaint against Defendants TD 

Ameritrade (“TDA”) and TD Ameritrade Futures & Forex (“TDAFF”) on July 9, 2020, which was 

subsequently amended to add Lindstrom on September 11, 2020. (Dkt. 1; Dkt. 17). Wang and 

Lindstrom alleged violation of the Commodity Exchange Act (“CEA”) and related regulations, 

breach of the implied covenant of good faith and fair dealing, negligence, and breach of contract. 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 2 of 12 PageID #:833
3

On December 12, 2020, the Court compelled Wang to arbitrate his claims and dismissed them 

without prejudice, dismissed Lindstrom’s claims without prejudice, entered judgment and 

terminated the case. (Dkt. 51; Dkt. 52; Dkt. 53); see also Lindstrom, 2020 WL 7398792 (N.D. Ill. 

Dec. 17, 2020). Lindstrom moved for leave to file a Second Amended Complaint on January 15, 

2021. (Dkt. 54). The Court then struck the entry of judgment, which was entered in error, and 

reopened the case. (Dkt. 60). The Court considered Lindstrom’s Proposed Second Amended 

Complaint but found that it did not adequately address the deficiencies it found when dismissing 

the First Amended Complaint. (Dkt. 62). Because the Proposed Second Amended Complaint 

could not withstand a motion to dismiss pursuant to Rule 12(b)(6), amendment was futile. (Id.) 

Lindstrom was denied leave to file his Proposed Second Amended Complaint, but the 

Court allowed him to file another amended complaint if he was able to do so. In permitting such 

an amendment, the Court cautioned Lindstrom:

Lindstrom may file an amended complaint which comports both 

with this Court’s order dismissing the First Amended Complaint and 

the present order. Lindstrom is encouraged to read both orders 

carefully and only file an amended complaint which addresses each 

of the enumerated deficiencies.

(Id. at 3). Lindstrom subsequently filed the instant Third Amended Complaint, which contains 

exactly three allegations not found in his Proposed Second Amended Complaint. (Dkt. 71 at ¶¶ 7, 

52, 74; see also Dkt. 74-1). 

LEGAL STANDARD

When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the 

Court must construe the complaint “in a light most favorable to the nonmoving party, accept wellpleaded facts as true, and draw all inferences in the non-moving party’s favor.” Bell v. City of 

Chicago, 835 F.3d 736, 738 (7th Cir. 2016). A party need not plead “detailed factual allegations,” 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 3 of 12 PageID #:834
4

but “labels and conclusions” or a “formulaic recitation of the elements of a cause of action will not 

do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint must contain 

sufficient factual matter that when “accepted as true . . . ‘state a claim to relief that is plausible on 

its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). 

Lindstrom’s claims under § 6b(e)(3) of the CEA and 17 C.F.R. § 180.1 sounds in fraud. 

Any allegation of fraud must be “state[d] with particularity,” although “malice, intent, knowledge, 

and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b). This 

heightened pleading requirement protects against the “great harm to the reputation of a business 

firm or other enterprise a fraud claim can do.” Borsellino v. Goldman Sachs Group, Inc., 477 F.3d 

502, 507 (7th Cir. 2007). Rule 9(b) requires that the plaintiff state “the identity of the person who 

made the misrepresentation, the time, place and content of the misrepresentation, and the method 

by which the misrepresentation was communicated to the plaintiff.” Windy City Metal Fabricators 

& Supply, Inc. v. CIT Tech. Fin. Svc’s, Inc., 536 F.3d 663, 668 (7th Cir. 2008). In other words, 

the plaintiff must allege the “who, what, when, where, and how” of the alleged fraud. Menzies v. 

Seyfarth Shaw LLP, 943 F.3d 328, 338 (7th Cir. 2019) (quoting Vanzant v. Hill’s Pet Nutrition, 

Inc., 934 F.3d 730, 738 (7th Cir. 2019).

DISCUSSION

I. Commodity Exchange Act (CEA) Fraud Claim (Counts I and III)

Count I of the TAC alleges that Defendants violated the Commodity Exchange Act

(“CEA), 7 U.S.C. § 9, and 17 C.F.R. § 180.1, a regulation promulgated by the CFTC pursuant to 

the CEA. Lindstrom alleges that Defendants violated 17 C.F.R. § 180.1(a)(3):

(a) It shall be unlawful for any person, directly or indirectly, in 

connection with any swap, or contract of sale of any commodity in 

interstate commerce, or contract for future delivery on or subject to 

the rules of any registered entity, to intentionally or recklessly:

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 4 of 12 PageID #:835
5

...

(3) Engage, or attempt to engage in any act, practice, or course of 

business, which operates or would operate as a fraud or deceit upon 

any person.

Therefore, the Court previously found that Lindstrom needed to plausibly allege (1) a 

material misrepresentation or omission by the defendant, (2) scienter; (3) a connection between 

the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the 

misrepresentation or omission; (5) economic loss; and (6) loss causation. Lindstrom v. TD 

Ameritrade, Inc., 2020 WL 7398792, at *3 (N.D. Ill. Dec. 17, 2020), citing Cornielsen v. Infinium 

Cap. Mgmt., 916 F.3d 589, 598 (7th Cir. 2019). The Court, in granting Defendants’ motion to 

dismiss the First Amended Complaint, provided Lindstrom with a thorough analysis of his claim 

and each of the ways it was deficient and failed to allege any of the elements of his fraud claim. 

See Lindstrom, 2020 WL 7398792 at *3-*5 (finding pleading deficiencies in alleging a material 

omission, scienter, reliance, loss, and loss causation). The Court rejected Lindstrom’s Proposed 

Second Amended Complaint for failing to correct these deficiencies, but Lindstrom brings nearly 

identical allegations here now and argues for a different outcome. 

A. Material Omission. 

Lindstrom identifies three omissions that he alleges support his fraud claim: (1) that 

TDAFF failed to notify/advise their customers of material information regarding the crude oil 

markets (TAC ¶87); (2) that TDAFF failed to act to mitigate Lindstrom’s losses by offsetting his

positions (TAC ¶88); and (3) that TDAFF failed to permit its trading platform to recognize 

negative pricing (TAC ¶88). With respect to the first two, Lindstrom merely states that he 

“standings on [his] prior briefing on these questions, and largely presents these claims in the 

Complaint for the purposes of appeal.” (Dkt. 78-1 at 5, n.2). It is not necessary or appropriate to 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 5 of 12 PageID #:836
6

replead rejected claims for purposes of appeal and the Court will not spend any further time on 

these claims. They are rejected for all the reasons given in the Court’s prior opinions on identical 

allegations. (Lindstrom, 2020 WL 7398792 at *3-4; Dkt. 62 at 2).

This leaves the allegation that Defendants failed to allow trades at negative prices. 

Defendants argue that Lindstrom has still failed to state an actionable omission. Lindstrom 

contends that “a more fully fleshed out allegation that [he] attempted to exit his position and was 

unable to do so changes the analysis” from the Court’s prior orders. (Dkt. 78-1 at 1). It does not. 

Lindstrom correctly notes that the Court called this alleged omission – that TDAFF failed to enable 

protocols on its platform that would permit investors to place negatively-priced trades – his “best 

allegation of a legally actionable omission.” Lindstrom, 2020 WL 7398792 at *4. The Court went 

on to say that the issue was that “there is no allegation that Lindstrom ever tried to place a trade 

while the prices were in the negatives.” Id. Lindstrom argues that the TAC “fixes this problem” 

because it alleges that “Plaintiff attempted to leave his positions and was unable to do so.” (Dkt. 

78-1 at 8). However, there is not a single allegation in the TAC that Lindstrom attempted to place 

a trade while prices were in the negatives. His new allegations are that “Plaintiff tried to access 

and [sic] his positions to make trades but was unable to. He tried to reach customer service and 

was unable to” (TAC ¶7) and that “[d]espite repeated efforts, Plaintiff Lindstrom was not even 

able to reach anyone in the customer order desk to place an order to exit his positions. Despite his 

efforts, he was unable to access his positions online.” (TAC ¶52) (new allegation in bold). The 

allegation that he points to (that “clients of TDFF were not able to place orders in the May 20 

Crude Oil products”) is not adequate to find that Lindstrom ever attempted to place such a trade 

(and indeed, that allegation was in the Proposed SAC and was insufficient then.) The Court has 

explicitly explained the need for such an allegation twice now. (Lindstrom, 2020 WL 7398792 at 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 6 of 12 PageID #:837
7

*3-4, Dkt. 62 at 2). Despite Lindstrom’s claim that a “reasonable and plain reading” of the TAC 

is that he “attempted to leave his position and was thwarted because his position was negative,” 

there is no such allegation in the Complaint. The Court can only agree with Defendants—if 

Lindstrom were able to make such an allegation in his third attempt to state a claim, he would 

have. Even taking all of Lindstrom’s allegations as true, as the Court must at this stage, Lindstrom

has not made any allegation that he ever tried to place a trade while the prices were in the negatives, 

and his fraud claim thus fails to allege an actionable omission. The claim fails on this basis alone, 

but the Court (for the third time) will consider the remaining elements.

B. Scienter

Lindstrom claims that he had adequately alleged scienter in his previous pleadings “but for 

the lack of the now-repaired deficiency having to do with Plaintiff’s attempt to exit his positions 

in the negative.” (Dkt. 78-1 at 13). As discussed above, Lindstrom has not pled that he attempted 

to exit his positions in the negative. However, as Defendants point out, this was not the only reason 

Lindstrom failed to plead this element of his fraud claim. (Dkt. 74 at 8-9). The Court also found 

in its prior orders that it was “not reasonable to infer that TDAFF made any of the alleged 

omissions with an intent to deceive or defraud. In fact, TDAFF had an obvious motive to inform 

its customers of the market conditions.” Lindstrom, 2020 WL 7398792 at *4. The Court found it 

was not reasonable to infer that TDAFF intended for Lindstrom to suffer these losses. The Court 

further found in rejecting his Proposed SAC (which, again, is nearly identical to the TAC) that 

Lindstrom had not pled adequate facts to support an inference that TDAFF had “a mental state 

embracing intent to deceive, manipulate, or defraud.” (Dkt. 62 at 2, citing Tellabs, Inc. v. Makor 

Issues & Rights, Ltd., 551 U.S. 308, 319 (2007) (emphasis added).) Lindstrom’s attorney argument 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 7 of 12 PageID #:838
8

in his Opposition cannot save him, when the TAC adds zero new allegations that TDAFF had an 

intent to deceive, manipulate, or defraud Lindstrom. 

C. Reliance

Lindstrom’s theory of reliance has remained the same throughout this case: that he would 

have sold his positions sooner had TDAFF not failed to update its systems to accept negatively 

priced trades. Defendant argues that Lindstrom has failed to plead any actual reliance because he 

did not allege that he would have exited his position sooner if not for the inability to do when the 

order was negatively priced. (Dkt. 74 at 9, Dkt. 80 at 8). Lindstrom argues that he alleges that he 

“relied on his ability to exit his positions, and was unable to do so.” (Dkt. 78-1 at 11). Reliance 

must be on the omission – the omission is not that Lindstrom generally was unable to place a trade, 

but that TDAFF did not allow negative trades. Because he never alleges that he tried and failed to 

make a trade that was negatively priced, there is no reliance. 

D. Loss & Loss Causation

The Court previously found that Lindstrom did not plead that Defendants’ alleged 

omissions proximately caused his losses instead of the market volatility that came part and parcel 

with the COVID-19 pandemic. Lindstrom, 2020 WL 7398792 at *5, Dkt. 62 at 2. Defendants 

argue that the Third Amended Complaint “offers nothing to address these defects.” (Dkt. 74 at 9). 

Lindstrom does not address this argument nor point to any new allegations on proximate causation. 

This element is not met for all the reasons given in the Court’s prior orders. (See Lindstrom at *5; 

Dkt. 62 at 2).

Count III, alleging violation of § 6b(e)(3) of the CEA is a single sentence simply 

incorporating Lindstrom’s other complaint allegations. (Dkt. 71 at ¶ 97). Count III is once again 

dismissed for the same reasons as Count I. 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 8 of 12 PageID #:839
9

II. Common Law Claims (Counts II, IV, V, VII)1

A. Good Faith and Fair Dealing (Count II)

Count II of the TAC alleges that TDAFF breached the implied covenant of good faith and 

fair dealing related to the Futures Client Agreement. Lindstrom’s allegation is that TDAFF 

violated its covenant by not liquidating his contracts until they were excessively under-margined, 

and by not creating a means by which Lindstrom could have placed a negative trade. In its Order 

dismissing the First Amended Complaint, the Court explained:

Lindstrom's theory here is that TDAFF violated this covenant by not 

liquidating his contracts until they became excessively undermargined and by not creating a means by which Lindstrom could 

have placed an order to exit his positions at a negative price. 

Lindstrom does not identify any contract provision that would have 

required TDAFF to take either of those actions. With respect to 

liquidation, the Futures Client Agreement specifically grants 

TDAFF the “sole discretion” to liquidate “without prior notice to 

Client” so as to eliminate any margin deficiency, and that “Client 

shall remain liable to TDAFF for any loss or debit balance that 

results.” (Dkt. 17 at p. 37.) The action TDAFF took here is 

specifically contemplated by the contract, so it did not injure 

Lindstrom's rights under the contract. With respect to placing 

negatively priced orders, it bears repeating that Lindstrom never 

alleges that he attempted to place such an order or that he knew that 

TDAFF did not have the capability to fulfill such an order. As such, 

TDAFF's failure to create such a system caused him no injury. 

Lindstrom, 2020 WL 7398792 at *5. Lindstrom’s Proposed SAC also “fail[ed] to identify such 

contractual provisions . . . and Lindstrom [did] not allege he attempted to place any negatively 

priced trades.” (Dkt. 62 at 2). 

The TAC remains almost wholly unchanged from the Proposed SAC, and the three 

additional allegations do not identify any contractual provisions of the Futures Client Agreement 

(or any other contract) that required TDAFF to allow liquidation in a more commercially 

1 There is no Count VI in the Third Amended Complaint. 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 9 of 12 PageID #:840
10

reasonable manner. As discussed with respect to Count I, Lindstrom fails to allege that he 

attempted to place any negatively priced trade. Lindstrom’s attempts to reargue an issue the Court 

already decided, without the benefit of any additional allegations, falls far short of stating a claim 

on this count. 

Lindstrom suggests that “[t]he only problem with the complaint initially, as the Court 

noted, was standing.” (Dkt. 78-1 at 12-13). He alleges he has remedied that problem, but that is 

incorrect. The first problem is that Lindstrom has now failed three times to identify any contractual 

provision requiring TDAFF to allow him to place negatively priced trades. On that point alone, 

this claim fails. Lindstrom’s failure to allege he ever attempted to place a trade while prices were 

negative is a second problem that has not been fixed (as discussed herein), and this claim is 

dismissed.

B. Breach of Contract (Count VII)

In rejecting the Proposed SAC, the Court reminded Lindstrom of its prior finding that “the 

contract in question specifically permitted TDAFF to liquidate his positions without prior notice, 

Lindstrom did not identify contractual provisions requiring TDAFF or TDA to update its systems, 

or that any act or failure to act on the part of TDAFF or TDA caused him harm. (Dkt. 52 at 12)” 

and concluded that “[t]he proposed Second Amended Complaint does not offer any contractual 

provisions to support this claim other than those previously rejected by this Court and nothing in 

the way of facts supporting causation.” The same is true of the nearly identical Third Amended 

Complaint. Instead of identifying any new allegations that support this claim (there are none), 

Lindstrom merely cribs from his previous briefing and raises an argument the Court has rejected. 

(Compare Dkt. 33 at 16-17 with Dkt. 78-1 at 12-13). The Court will not belabor this analysis: 

Lindstrom was instructed to file a new complaint, if he could, that complied with the Court’s 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 10 of 12 PageID #:841
11

orders. On this count and others, he has not done so. Because Lindstrom does not identify any 

contractual provision that was violated and there are no new allegations supporting this previously 

rejected contract claim, it remains deficient for all the reasons given in the Court’s prior opinions. 

C. Negligence and Gross Negligence (Counts IV and V)

The parties agree that Plaintiff’s allegations of negligence and gross negligence remain 

unchanged from his prior complaints and should be dismissed for the same reasons that the Court 

previously determined. (Dkt. 78-1 at 5-6, Dkt. 80 at 10). These claims were dismissed because 

Lindstrom suffered pure economic loss and did identify any duty TDAFF owed Lindstrom outside 

those created by contract. Lindstrom, at *5. Then, in rejecting Lindstrom’s bid to file his Proposed 

Second Amended Complaint, the Court noted that he still alleged only that he “suffered purely 

economic loss and add[ed] no new facts regarding extra-contractual duties or causation.” (Dkt. 62 

at 3). Lindstrom’s opposition to the instant motion acknowledges that the Court has already so 

ruled, and “does not respond to the arguments [raised by Defendants] regarding negligence and 

gross negligence.” (Dkt. 78-1 at 6). By itself, Lindstrom’s failure to respond to Defendants’ 

arguments on these counts in his Opposition constitutes waiver. Bonte v. U.S. Bank, N.A., 624 

F.3d 461, 466 (7th Cir. 2010) (“Failure to respond to an argument [ ] results in waiver.”). 

Lindstrom admits he has not responded to Defendants’ arguments—no further analysis is 

necessary, and the claims can be dismissed on that basis alone. In addition, it is inappropriate to 

bring claims previously dismissed without attempting to cure the deficiencies the Court previously 

identified in its orders. Those same deficiencies remain and these claims are dismissed.

III. Defendant TDA

Finally, Defendants argue that Lindstrom’s claims against Defendant TDA should be 

dismissed because the TAC still does not adequately allege that TDA was responsible for any of 

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 11 of 12 PageID #:842
12

the claimed conduct. (Dkt. 74 at 12). The Court’s prior opinion was clear: “the [FAC] allegations 

pertain almost exclusively to TDAFF. TDA receives nothing more than a few passing references. 

Most of the count-specific allegations never even mention TDA. The [FAC] leaves the Court 

unsure about why TDA is even a defendant in this case. The scant allegations against TDA do not 

satisfy the federal pleading standards, so all the claims against TDA are dismissed without 

prejudice.” Lindstrom, 2020 WL 7398792 at *6. Plaintiff nonetheless kept TDA in this case and now 

admits that “no additional facts were alleged regarding Defendant TD Ameritrade, Inc., this brief 

will not argue that issue any further, and will simply adopt prior briefing on that issue (once again, 

to save the matter for any potential appeal).” (Dkt. 78-1 at 6). In short: TDA was dismissed, 

Plaintiff chose to keep TDA in the case despite making zero new allegations (studiously ignoring 

the Court’s orders), and TDA is once again dismissed. 

CONCLUSION

 For the foregoing reasons, Defendants’ Motion to Dismiss is granted. (Dkt. 73). The 

Court allowed Lindstrom to bring this TAC if he could fix the deficiencies identified in the Court’s 

prior orders. Instead, Lindstrom filed a TAC that is nearly identical to the Proposed Second 

Amended Complaint and at every turn misconstrued or blatantly ignored the Court’s orders. As 

Lindstrom has had several opportunities to state a viable claim and has failed to do so, the Third 

Amended Complaint is dismissed with prejudice.

____________________________________

Virginia M. Kendall

United States District Judge

Date: July 6, 2022

Case: 1:20-cv-04028 Document #: 83 Filed: 07/06/22 Page 12 of 12 PageID #:843