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TD Ameritrade faces lawsuit(Omaha World-Herald (NE) (KRT) Via Thomson Dialog NewsEdge) Sep. 20--TD Ameritrade received complaints about spam reaching clients' brokerage e-mail addresses months before it announced Friday that hackers had taken contact information on the company's customers , a client's lawsuit claims. In its announcement, the company said hackers gained access to 6.3 million customers' names, addresses, phone numbers and e-mail addresses. Matthew Elvey of San Francisco said in his suit that he started getting spam -- plugs for cheap stocks often used in so-called pump-and-dump scams -- about Nov. 15 at an e-mail address used only for his TD Ameritrade account. Changing the e-mail address and his hard drive in April did not stop the spam, Elvey said in the suit, and he notified TD Ameritrade on May 18. He sued May 30 in U.S. District Court in San Francisco. The suit maintains that the online brokerage should have notified clients about the problem sooner than it did. Scott Kamber, one of Elvey's lawyers, said in an interview he thinks TD Ameritrade made the announcement last Friday only to get out its version of the attack before a federal judge ordered it to notify clients that their contact information may have been stolen. No such order has been made. Lawyers for Elvey and TD Ameritrade last week agreed to a two-week postponement of a Sept. 18 hearing on the plaintiff's motion for a preliminary injunction and a defense motion for dismissal. Kamber said Tuesday that he believes an injunction would spell out what a disclosure by TD Ameritrade would have to say. "Ameritrade wanted to use the delay to make sure the first disclosure was on its terms," he said. TD Ameritrade spokeswoman Kim Hillyer said Wednesday the company does not comment on litigation. She said the same thing when asked about assertions in the suit that the company was aware of the problem months ago. Hillyer did say the company had been investigating the outbreak of spam for a time and had responded to individual clients' inquiries. "We knew clients were getting spam," Hillyer said. She said the code that made the intrusion possible had been found within the last couple of weeks. "Once we stopped it, we notified our clients," she said, referring to Friday's announcement. Elvey's suit says TD Ameritrade's actions breached its privacy policy inadvertently or intentionally. The company may have violated California law by not disclosing the breach, the suit said. The suit also asks that TD Ameritrade be prohibited from telling its customers to delete the stock spam, as it had been doing but has now stopped. Deleting the spam would be destroying evidence that would be useful in a class-action suit, according to the suit. Elvey is asking that the suit be made a class action. In asking a judge to dismiss the suit, TD Ameritrade said the plaintiff "manufactured a harm" for the purpose of bringing a suit, noting that Elvey didn't file the suit until seven months after he said he began receiving spam. Spam is nothing more than an inconvenience and an annoyance that most e-mail users experience, the company said in its reply to the suit. The alleged damage could have been avoided by discontinuing use of the e-mail addresses, TD Ameritrade said. The company noted in its motion that its privacy statement states that no security system is impenetrable. TD Ameritrade has said that while people's contact information was compromised, it has no evidence that their Social Security numbers, birth dates or account numbers, while exposed to theft, were taken. It said the actual accounts were in a separate database that was not hacked. Elvey is identified in the suit as an information technology consultant who sets up networks and designs and maintains infrastructure, security systems and databases. To see more of the Omaha World-Herald, or to subscribe to the newspaper, go to http://www.omaha.com. Copyright (c) 2007, Omaha World-Herald, Neb. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |