Charles Schwab Takes Legal Action Against TD Waterhouse

by Glen Shapiro, LawAndTax-News.com, New York

16 March 2005

In a trade libel lawsuit launched on Monday, brokerage firm Charles Schwab Corp. accused rival TD Waterhouse of falsely implying in advertisements that it has high prices and gives an inferior service.

The adverts in question first appeared on television and in print in 2003, and urged investors to "switch to TD Waterhouse, the alternative to higher priced brokers like Merrill and Schwab".

Although that particular campaign ended last year, TD Waterhouse's current advertisements represent a variation on the same theme, describing the firm as "the alternative to Schwab and higher priced brokers like Merrill Lynch".

Schwab has reportedly called for the court to ban the offending ads, and for unspecified damages.

Speaking in a recent interview with the Associated Press, the brokerage firm's founder, Charles Schwab explained that:

"I have been working darn hard for more than 30 years to build our reputation, so I am not going to stand by and let them run ads that are patently false."

TD Waterhouse, meanwhile, has announced that it is standing by its claims, and spokesman Kevin Dino told the AP on Monday that:

"We're surprised that Schwab would use litigation in an attempt to silence the competition."

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