Judge Walker repeatedly asked the former class counsel to place a value on the benefits the rejected settlement offered to the class. I think it’s doable, and no one has truly done so, so I’m going to give it a shot.

  • The audit component does not require TD Ameritrade to fix the problems found, and mainly benefits the firm, not its clients, so I give it a value of $50.  Weekly penetration testing can be ordered for about $100/per YEAR, so this is generous. I discussed this in more detail in my CMC statement (see page 10 of that document) and in a forthcoming (currently private) blog post dedicated to this component.
  • Regarding the software offered in the rejected settlement: TD Ameritrade defied the judge’s order; they never plainly stated how much they had or would pay for the software.  Though I was given an approximation, I can’t disclose it, and have little faith in the source or the number (and no, it’s not from a whistleblower).  I feel the software component should be valued based upon actual redemption rates, as tracked by proof of payments received for the software by the software firms from TD Ameritrade after the final settlement date. For each class member who downloads (and if activation is required, activates) the software, the value should be $5 (This is five times the amount the firm has implicitly represented as the cost.) If the Trend Micro or other software comes with the standard 3-year, 3-computer license, then its valuation should be trebled.  Postscript: it seems I was right to not trust the source for the approximation; I was told TD Ameritrade had already paid or committed to pay a certain amount the software.  If that was true, they wouldn’t have removed it from the settlement agreement, as it was a sunk cost, even if its value was being discounted by the court, it certainly still had some value. 

KamberEdelson/KamberLaw/Edelson McGuire law firm/attorney compensation, if any should be based not upon the rates they proffered the court, but rather upon the hourly rates at which the firm agreed to represent the class, as recorded in the contract signed May 14, 2007, of $500 (Scott Kamber and Alan Himmelfarb), and $335 (Ethan Preston and Dana Rubin), and an appropriate multiplier, and on the value of the settlement, and factoring the quality of the representation – which led to another firm, Kreindler and Kreindler stepping in as lead plaintiff’s counsel.

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