Elvey V. TD Ameritrade - May 31, 2007 - Complaint

CLASS ACTION COMPLAINT
Matthew Elvey ("Elvey" or "Plaintiff"), for his complaint, alleges as follows upon
information and beliefe, based upon, iner alia, investigation conducted by and through his
attorneys, except as to those allegations pertaining to Plaintiff and his counsel personally, which
are alleged upon knowledge:

Nature of the Claim

This case is about TD AmeriTrade's provision of its accountholder's private emailaddresses to spammers, which sent and continue to send unsolicited commercial email
(particularly email promoting certain penny stocks) ("stock spam") to these private
email addresses. The exposure of its accountholder's email addresses violated and breached TO AmeriTrade's privacy policy.
2.
This is a national class action brought on behalf of two classes: I) TO AmeriTrade accountholders residing in California ("California Resident Class"), and 2) Internet access services which received spam sent to TO AmeriTrade accountholder's email addresses which is traceable to TO AmeriTrade's breach of its privacy policy ("CAN SPAM Class").

3.
TO AmeriTrade's provision of its accountholder's email addresses not only facilitated the transmission of spam to its accountholder's email addresses, it did so in violation of express representations in its privacy policy that it would not share its accountholder's personal information with third parties (except for certain situations not applicable here). On behalf of the California Resident Class, Elvey seeks injunctive relief under California's Consumer Legal Remedies Act ("CLRA") (Cal. Civ. Code § 1782(a)), equitable relief under California's Unfair Competition Law ("UCL") (Cal. Bus. & Prof. Code § 17203), and damages and equitable relief for breach of fiduciary duty.

4.
TO AmeriTrade's provision of its accountholder's emails facilitated and initiated the transmission of various stock spam to their Internet facilities, in violation of the CAN SPAM Act of 2003. On behalf of the CAN SPAM Class, Elvey seeks damages and injunctive relief under 15 U.S.C. § 7706(g).

Parties
5.
Plaintiff Matthew Elvey: Matthew Elvey is a resident of San Francisco, California. Elvey is an accountholder at TO AmeriTrade. Elvey maintains a domain name. Elvey provides mail and web service for that domain name (although Elvey subcontracted the maintenance and hosting of the server which provides those services to a third party). Elvey also provides for email accounts (including forwarding, filtering and technical support) as a service to his users, as well as disposable email accounts.

6.
Defendant TD AmeriTrade, Inc.: TO AmeriTrade, Inc. ("TO AmeriTrade") is a New York corporation which maintains its headquarters at 4211 South I02nd Street, Omaha, Nebraska 68127. TO AmeriTrade provides securities brokerage services, with retail
brokerage representing the vast majority of its business. TO AmeriTrade was established
in 1971 as a local investment banking firm and began operations as a retail discount
securities brokerage finn in 1975. TO AmeriTrade has an estimated 6,191,000
accountholders as of September 2006.

Jurisdiction and Venue
7.
Elvey asserts a claim under the CAN SPAM Act for damages and injunctive remedies on behalf of himself and all others similarly situated. This Court has federal subject matter jurisdiction over this case under 28 U.S.C. § 1331.

8.
Defendant is a New York corporation headquartered in Nebraska. Defendant can only be a citizen in New York and Nebraska. The members of the California Resident Class (and the California CAN SPAM Class) are diverse from Defendant. The CAN SPAM Class is a national class whose members are scattered throughout the fifty states (including the 48 states besides New York and Nebraska) and the U.S. territories: there is minimal diversity of citizenship between proposed lAS class members and the Defendant. The aggregate ofclaims asserted in both classes exceed the sum or value of $5,000,000. This Court has subject matter jurisdiction over this case under 28 U.S.C. § 1332(d)(2).

9.
This Court has personal jurisdiction over the Defendant under Cal. Code Civ. Proc. §

410.1 0 because some ofthe acts alleged herein were committed, and Plaintiff incurred injury, in California (and, specifically, the Northern District of California).

10.
Venue is also proper before this Court under 28 U.S.C. § 1391(b)(l), (2), (c).

Intradistrict Assignment

A substantial part of the events which give rise to the claim occurred in the place of Elvey's business and residence, San Francisco, in San Francisco County, California. Under Local Rule 3-2(e), this civil action should be assigned to the San Francisco division ofthe Northern District of California.

Factual Background
Email Anatomy: The domain name portion of an email address follows the @ symbol. (Thus, the domain name for "webmastertgtcand.uscourts.gov" is "cand.uscourts.gov''.) The domain name is used to direct email to the correct email server, where a user can access the messages sent to his address. The CAN SPAM Act defines "domain name" as "any alphanumeric designation which is registered with or assigned by any domain name registrar, domain name registry, or other domain name registration authority as part of an electronic address on the Internet." IS U.S.C. § 7702(4). The CAN SPAM Act defines "header information" as "the source, destination, and routing information attached to an electronic mail message, including the originating domain name and originating electronic mail address, and any other information that appears in the line identifying, or purporting to identify, a person initiating the message." IS U.S.c. § 7702(8). Stock Spam: Stock spammers typically buy some portion ofthe stock before they tout it, heavily promote the stock via spam, and then sell the stock after its prices rises on the purchases of spam recipients. It has been shown that stock spam correlates with significant short-term increases in the touted stock prices (and a corresponding collapse soon thereafter). See Laura Frieder & Jonathan Zittrain, Spam Works: Evidence from Stock Touts and Corresponding Market Activity, available at
http://papers.ssrn.com/soI3/papers.cfm?abstract_id=920553 (Mar. 14,2007); Rainer Bohme & Thorsten Holz, The Effect ofStock Spam on Financial Markets, available at http://papers.ssrn.com/soI3/papers.cfm?abstractjd=897431 (Apr. 2006). Elvey's First Email Address: First When Elvey became an accountholder with TO AmeriTrade, he provided TO AmeriTrade with an email address (vFirst Email Address"). The First Email Address was unique: Elvey never otherwise published, used, or provided the First Email Address to any other person. Consequently, the only persons who had the First Email Address were TO AmeriTrade and Elvey.

TD AmeriTrade's Privacy Statement: At all times relevant to this complaint, including prior to Elvey's provision ofthe First Email Address to TO Arneri'Trade, TO AmeriTrade published a Privacy Statement which indicated that TD AmeriTrade wouldnot disclose personal information to third parties, except in certain circumstances that do
not apply to this Complaint. The relevant portion ofthe Privacy Statement has been
reproduced below:
00 we share the information collected with any other third parties? The cornerstone ofour Privacy Statement is the commitment to keep our clients' personal information confidential. TD AMERITRADE does not sell, license, lease orotherwisedisclose yourpersonalinformationto anythirdpartyfor any reason, except as noted earlier and as described below:

•
To help us improve our services to you, we may engage another business to help us to carry out certain internal functions such as account processing, fulfillment, client service, client satisfaction surveys or other data collection activities relevant to our business. We may also provide a party with client information from our database to help us to analyze and identify client needs and notify clients ofproduct and service offerings. Use ofthe information shared is strictly limited to the performance ofthe task we request and for no other purpose.

•
Periodically, we may invite you to participate in advertisements, promotions and special offers offered by TO AMERITRADE or by other sponsoring organizations. These could include retailers, airlines and Internet service providers. Your participation may require us to gather and share your personal information or may require you to supply personal information to the promotion sponsor. For example, a referral program may require that we provide your name as a reference to a prospective client. It is always your choice whether or not to participate.

All third parties with which we share personal information are required to protect personal information in a manner similar to the way we protect personal information. Examples of information shared are identifying information such as name, mailing address, e-mail address, telephone number, and information on account activity.
Ifat any time you choose to purchase a product or service offered by another
company, any personal information you share with that company will no longer
be controlled under our Privacy Statement.
TD AMERITRADE also reserves the right to disclose your personal information
to third parties where permitted by law or where required by law to regulatory,
law enforcement or other government authorities. We may also disclose your
information as necessary to credit reporting or collection agencies, or when
necessary to protect our rights or property.
TO AmeriTrade, TD AA1ERlTRADE Privacy Statement,
http://www.tdameritrade.com/privacy.html(Feb. 2007) (emphasis added).

Elvey Receives Spam at the First Email Address: Nonetheless, beginning on or aboutNovember 15,2006, Elvey began to receive stock spam at the First Email Address. The
spam promoted penny stocks (low-priced, speculative security of smaller firms,
typically traded outside the major exchanges (NYSE, NASDAQ, or AMEX)). The spam
urged its recipients to purchase the touted stock.

18.
Elvey's Second Email Address: On or about April 12, 2007, Elvey provided TD AmeriTrade with another email address ("Second Email Address"). To ensure that he was not responsible for leaking the Second Email Address in any way, Elvey set up a separate hard drive with a separate operating system on his computer for the exclusive purpose of logging into TD AmeriTrade's website and checking email from TD AmeriTrade -prior to providing TD AmeriTrade with the Second Email Address.

19.
Again, Elvey never otherwise published, used, or provided the Second Email Address to any other person, and the only persons who had the Second Email Address were TD Ameri'Trade and Elvey. Nonetheless, Elvey began to receive stock spam at the Second Email Address.

20.
Spam Traceable to the Breach ofTD AmeriTrade's Privacy Statement: The spam sent the First Email Address contained false and inaccurate header information. The domain name for the mail server through which the spam was sent did not match the domain name for the originating email address (which indicates the originating email address was false). Indeed, although the originating email addresses contains a real domain name, the name transmitted with the email address and the originating email address itselfwere false. Initial investigations indicate that the originating emaiIsare invalid, because the mail servers responsible for the domain names contained in these email addresses returned email to a sampling of these originating email addresses and indicated that the email addresses did not exist.

21.
Elvey never received spam at any other email addresses at his domain name that would indicate that the spam sent to the First and Second Email Addresses were merely part of a "dictionary" attack. In a dictionary attack, spammers attempt to send spam to email addresses at a particular domain name by methodically guessing and/or testing which domain names are valid.

22.
Having eliminated every other possibility, Elvey and his counsel conclude that TD AmeriTrade revealed the First and Second Email Addresses to third parties, which send the stock spam to the First and Second Email Addresses. The spam Elvey received is indelible proof that TD AmeriTrade breached its Privacy Statement, either inadvertently or intentionally. All told, Elvey received about 80 spam messages to date via the First and Second Email Addresses.

23.
As the spam sent to the First and Second Email Addresses is uniquely attributable to TD AmeriTrade's exposure its accountholder's email addresses to spammers, Plaintiff can establish a set of spam common to each of the class members alleged herein that is traceable to such exposure ("Traced Spam"). Spam is automated and digitally identical: a statistically sound sampling of CAN SPAM Class members will prove, by a preponderance of evidence, that particular Traced Spam messages sent to the sampled class members were in fact sent to all class members.

24.
Elvey's Correspondence to TD AmeriTrade: Elvey's counsel sent correspondence by certified or registered mail, return receipt requested, dated May 18,2007, demanding that TD AmeriTrade rectify the preceding breach of the Privacy Statement for all California residents. TD AmeriTrade received this correspondence on May 21, 2007, when the return receipt was signed by one Arnie Hermanson.

25.
TD AmeriTrade's Communication to Alleged Class Members: On May 30, 2007, Elvey and his counsel learned that the situation was very widespread through a story on Slashdot (a prominent online forum for technology and technology policy news). See Slashdot, Who's Trading Your E-mail Addresses?al http://yro.slashdot.org/yro/07/05/3011444236.shtml (May 30, 2007). Through this story, Elvey learned that his situation was far from unique and that TD AmeriTrade breach the Privacy Statement, not only with respect to himself, or even all California residents, but apparently with respect to all TD AmeriTrade's accountholders, without limitation.

26.
The story further indicates TD AmeriTrade's response to customer inquiries is to either deny any breach of the Privacy Statement and attribute the spam to dictionary attacks or 2) indicate it is investigating the situation, but decline to provide further details.

27.
The story indicates that the exposure of accountholders' email addresses continues to the present day. IfTO AmeriTrade's exposure ofaccountholders' email addresses is intentional, it is lying to its customers. If TO AmeriTrade's exposure of accountholders' email addresses is unintentional.as it appears from taking TO AmeriTrade's statements at face value, whatever security breach led to the exposure is ongoing and has not yet beenfixed.

28.
An ongoing security breach at TO AmeriTrade would be problematic on several levels. First, if TO AmeriTrade cannot secure its information system, accountholders cannot be sure that the funds and securities in their account are safe from diversion. If spammers can steal email addresses from TO AmeriTrade, they can also steal funds.

29.
Second, an ongoing security breach renders the representations made in the Privacy Statement knowingly and intentionally misleading. TO AmeriTrade continues to entice new accountholders to sign up and provide personal information to it under the representation that it will secure that information from third parties, while it knows (or should know) that representation is false.

30.
Third, TO AmeriTrade is generally privy to a wealth ofsensitive financial information regarding its accountholders. Without any information about the scope ofthe security breach, Elvey and the other accountholders must presume this information is unacceptably vulnerable in an ongoing security breach.

31.
Last, at least with respect to California residents, and residents of many other states, TO AmeriTrade is obligated to disclose suspected security breaches to its accountholders under Cal. Civ. Code § 1798.82. Ifthere is a security breach, TO AmeriTrade may have violated is statutory duties to disclose the same to California residents.

32.
Elvey would ordinarily wait until 30 days after the transmission ofthe correspondence alleged above, pursuant to Cal. Civ. Code § 1782(a). However, TO AmeriTrade's communications with potential class members, and the implications ofan ongoing security breach TO AmeriTrade have impelled Elvey to act immediately.

TD AmeriTrade's Spoliation orEvidence: Further, the story indicates that TD AmeriTrade's current response to inquiring customers asks them to "be sure to delete any spam you might receive, then empty your e-mail's trash so that it's no longer kept there, either." It appears that, although TO AmeriTrade was aware of potential class claims no later than May 21, 2007, it still urges potential class members to destroy this evidence.

Class Certification Allegations

34.
Plaintiff seeks certification of a California Resident Class and a CAN SPAM Class under both Rule 23(b)(2) and Rule 23(b)(3).

35.
The California Resident Class asserts claims for breach of fiduciary duty, and for violations of California's CLRA (Cal. Civ. Code §§ 1750-84), and UCL (Cal. Bus. & Prof. Code §§ 17200-10) on behalfofall TD AmeriTrade accountholders residing in California.

36.
The CAN SPAM Class asserts claims for violations of the CAN SPAM Act of2003 (15

U.S.C. §§ 7701-13) on behalf of all persons and entities who qualify as Internet access services under 15 U.S.C. § 7702(11) who received spam at the email addresses of TD AmeriTrade's accountholders which is traceable to TD AmeriTrade breach of its privacy policy.

37.
Adequate Representation: Plaintiff will fairly and adequately represent and protect the interests ofthe both Class members, and has retained counsel competent and experienced in complex class actions. Plaintiff has no interest antagonistic to those of either Classes, and Defendant has no defenses unique to Plaintiff.

38.
Predominance and Superiority: This class action is appropriate for certification because class proceedings are superior to all other available methods for the fair and efficient adjudication ofthis controversy, since joinder of all members is impracticable. The damages suffered by each individual member of either Class will likely be relatively small, especially given the burden and expense of individual prosecution of the complex litigation necessitated by the actions of Defendant. It would be virtually
impossible for the members ofeither Class individually to obtain effective relief from
the misconduct of Defendant. Even if members of either Class themselves could sustain
such individual litigation, it would still not be preferable to a class action, because
individual litigation would increase the delay and expense to all parties due to the
complex legal and factual controversies presented in this Complaint. By contrast, a class
action presents far fewer management difficulties and provides the benefits of single
adjudication, economy ofscale, and comprehensive supervision by a single Court.
Economies of time, effort, and expense will be fostered and uniformity of decisions will
be ensured.

Policies Generally Applicable to the Class: This class action is also appropriate for certification because Defendant has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to either Class as a whole. The policies of the Defendant challenged herein apply and affect members of both Class uniformly, and Plaintiffs challenge of these policies hinges on Defendant's conduct, not on facts or law applicable only to Plaintiff.Allegations to Certification of California Resident Class

Definition ofthe California Resident Class: Pursuant to Federal Rule of Civil Procedure 23, Plaintiff brings this Complaint against TD AmeriTrade on behalf of himself and all persons who are accountholders ofTD AmeriTrade who reside in California. Excluded from the California Resident Class are I) any Judge or Magistrate presiding over this action and members of their families; 2) Defendant, Defendant's subsidiaries, parents, successors, predecessors, and any entity in which the Defendant or its parent has a controlling interest and their current or former employees, officers and directors; and 3) persons who properly execute and file a timely request for exclusion from the class and 4) the legal representatives, successors or assigns of any such excluded persons.

41.
California Resident Class Numerosity: The exact number of California Resident Class members is unknown and is not available to Plaintiff, but it is clear that individual joinder of all Class members is impracticable. In SEC filings, TO AmeriTrade estimated it had 6,191,000 accountholders as of September 2006. According to recent U.S. Census estimates, approximately 12% of the US population resides in California. Assuming that TO AmeriTrade's accountholders are distributed evenly across the US population, there are some 740,000 TO AmeriTrade accountholders residing in California. California Resident Class members can be easily identified through TO AmeriTrade's records.

42.
California Resident Class Commonality: Common questions of fact and law exist as to all California Resident Class members and predominate over the questions affecting only individual California Resident Class members. These common questions include:

(a)
Whether TO AmeriTrade exposed or provided email addresses ofthe California Resident Class members to spammers;

(b)
Whether such exposure violated TO AmeriTrade's Privacy Statement;

(c)
Whether such exposure was intentional or unintentional on TD AmeriTrade's part;

(d)
Whether TO AmeriTrade's Privacy Statement represented that TO AmeriTrade's services have characteristics, uses, and benefits, or quantities which they do not have, in violation of Cal. Civ. Code § 1770(a)(5);

(e)
Whether TD AmeriTrade's Privacy Statement represented that TO AmeriTrade's services confer or involves rights, remedies, or obligations which they do confer not or involve, in violation of Cal. Civ. Code § 1770(a)(14);

(D Whether, in light ofthe exposure and provision of California Resident Class members' email addresses to spammers, TO AmeriTrade's Privacy Statement was deceptive under Cal. Bus. & Prof. Code § 17200;

(g)
Whether TD AmeriTrade owed the California Class members a fiduciary duty as their broker;

(h)
Whether TD AmeriTrade owed the California Class members a fiduciary duty by dint of its collection of personal information underthe Privacy Statement;

(i)
Whether TD AmeriTrade breached such fiduciary duties through the violation of its Privacy Statement;

(j)
Whether TO AmeriTrade failed to fully and accurately disclose the
exposure and provision of California Resident Class members' email addresses to spammers and any underlying security breach;

(k)
Whether, in light of Cal. Civ. Code § 1798.82, TD AmeriTrade's failure to disclose any security breach was unlawful under Cal. Bus. & Prof. Code § 17200;

(I)
Whether, in light of its fiduciary duties, TD AmeriTrade's failure to disclose any security breach violated its fiduciary duties to the California Resident Class members;

(m)
Whether TD AmeriTrade violated the CLRA;

(n)
Whether TD AmeriTrade violated the UCL;

(0)
Whether Plaintiff and the California Resident Class are entitled to relief. and the nature of such rei ief. '

California Resident Class Typicality: Plaintiffs claims are typical ofthe claims of other California Resident Class members, as the Plaintiff and other California Resident Class members sustained damages arising out of the wrongful conduct of Defendant, based upon the same transactions which were made uniformly to the Plaintiffand the public.

Allegations to Certification of CAN SPAM Class
44.
Definition ofthe CAN SPAM Class: Pursuant to Federal Rule of Civil Procedure 23, Plaintiff brings this Complaint against TD AmeriTrade on behalf of himself and all persons and entities I) responsible for receiving email to the email addresses provided to TD Ameri'Irade's accountholders, and provide TD AmeriTrade's accountholders access to that email, 2) which received Traced Spam through computers located in the United States. Excluded from the CAN SPAM Class are 1) any Judge or Magistrate presiding over this action and members oftheir families; 2) Defendant, Defendant's subsidiaries, parents, successors, predecessors, and any entity in which the Defendant or its parent has a controlling interest and their current or former employees, officers and directors; and 3) persons who properly execute and tile a timely request for exclusion from the class and 4) the legal representatives, successors or assigns of any such excluded persons.

45.
CAN SPAM Class Numerosity: The exact number of CAN SPAM Class members is
unknown and is not available to Plaintiff, but it is clear that individual joinder of all
Class members is impracticable. As TO AmeriTrade is an online brokerage service, it
stands to reason that some or all of its estimated 6,191,000 accountholders provided it
with email addresses. Potential CAN SPAM Class members can be identified by the
email addresses contained in TO AmeriTrade's records; membership in the class can be
confirmed either by actual production of Traced Spam or can be inferred from the proof
of the Traced Spam.

46.
CAN SPAM Class Commonality: Common questions of fact and law exist as to all CAN SPAM Class members and predominate over the questions affecting only individual CAN SPAM Class members. In addition to the questions which predominate the California Resident Class, these common questions include:

(a)
Whether the CAN SPAM Class members are "Internet access services" underthe meaning of15U.S.C. §7702(11);

(b)
Whether Traced Spam constitutes "commercial electronic mail message" under the meaning of 15 U.S.c. § 7702(11);

(c)
Whether Traced Spam's header information was "materially false or materially misleading" under the meaning of 15 U.S.c. § 7704(a)(l);

(d)
Whether TO AmeriTrade's involvement in the provision of its accountholder's email addresses to spammers is such that it "initiate[d] the transmission" of the Traced Spam under the meaning of IS U.S.C. § 7704(a)(l);

(e)
Whether TO AmeriTrade violated 15 U.S.C. § 7704(a)( I);

(f)
Whether Plaintiff and the CAN SPAM Class are entitled to relief, and the nature ofsuch relief.

CAN SPAM Class Typicality: Plaintiff's claims are typical ofthe claims of other California Resident Class members, as the Plaintiff and other California Resident Class members sustained damages arising out ofthe wrongful conduct of Defendant, based upon the same transactions which were made uniformly to the Plaintiff and the public.

Class Allegations

Exposure ofAccountholder Email Addresses to Spammers: TO AmeriTrade has exposed, intentionally or unwittingly, the email addresses of its accountholders to spammers. There exists a set of spam which is uniquely and exclusively traceable to this exposure.

49.
Privacy Statement: TO AmeriTrade collected information under its Privacy Statement. Its accountholders entrusted this information to TO AmeriTrade and relied on TO AmeriTrade to keep such information confidential, because TO AmeriTrade was their stock broker, because TO AmeriTrade had a superior knowledge with respect to such information security matters, and because the Privacy Statement urged the accountholders to entrust their personal information to TO AmeriTrade. In light of the exposure above, TO AmeriTrade's Privacy Statement is deceptive and misleading; specifically, whether TO AmeriTrade's Privacy Statement represents that TO AmeriTrade's services have characteristics, uses, and benefits, or quantities which they do not have, and confer or involves rights, remedies, or obligations which they do confer not or involve.

50.
Nondisclosure ofSecurity Breach: TO AmeriTrade has not affirmatively disclosed the events that led to the exposure of its accountholders' email addressestospammers.To the extent it has responded to accountholder inquiries about these events, it has deliberately failed to disclose these events fully and accurately.

Count I: Violation ofthe CLRA, Cal. Civ. Code § 1770
51.
Plaintiff incorporates the above allegations by reference.

52.
TO AmeriTrade's Privacy Statement represented that TO AmeriTrade's services have characteristics, uses, and benefits, or quantities which they do not have, in violation of Cal. Civ. Code § 1770(a)(5), namely that TO AmeriTrade would not disclose accountholders' email addresses to third parties.

53.
TO AmeriTrade's Privacy Statement represented that TO AmeriTrade's services have confer or involves rights, remedies, or obligations which they do confer not or involve, inviolation ofCal.Civ,Code §I770(a)(14),namely thatTDAmeriTradewouldnot disclose accountholders' email addresses to third parties.

54.
Further, TO AmeriTrade continues to violate the CLRA, Cal. Civ. Code § 1770, to the extent TO AmeriTrade fails to correct the deception created by the Privacy Statement and its own failure to disclose the events that led to the exposure of its accountholders' email addresses to spammers.

55.
TO AmeriTrade's instructions to accountholders to destroy Traced Spam are tantamount spoliation of evidence and also violate the CLRA.

56.
Elvey and the other California Resident Class members have sustained injuries from TO AmeriTrade's CLRA violations and will suffer additional injury if these violations continue.

57.
Elvey, on his own behalfand behalfofthe other California Resident Class members, seeks an order enjoining TO AmeriTrade's CLRA violations alleged herein, restitution of property gained by the CLRA violations (including commissions on trades while actionable failure to disclose information was ongoing), and court costs and attorney's fees under the CLRA (Cal. Civ. Code § 1780(a».

Count II: Violation of California's VCL, Cal. Bus. & Prof. Code § 17200

58.
Plaintiff incorporates the above allegations by reference.

59.
Plaintiff and members ofthe class paid money to utilize TO AmeriTrade's services as advertised on its website and as provided for in its Privacy Statement.

60.
TO AmeriTrade's Privacy Statement was deceptive, and Plaintiff and members ofthe class did not receive TO Ameri'Irade's services as promised.

61.
TO AmeriTrade continued failure to correct the deception created by the Privacy Statement and its own failure to disclose the events that led to the exposure of its accountholders' email addresses to spammers is deceptive and unlawful under

62.
TO AmeriTrade's instructions to accountholders to destroy Traced Spam are tantamount to spoliation of evidence and are unfair and deceptive.

63.
The acts alleged above are unlawful, unfair or fraudulent business acts or practices and constitute unfair competition under Cal. Bus. & Prof. Code § 17200.

64.
Elvey and the other California Resident Class members have sustained injuries from TO AmeriTrade's unfair competition and will suffer additional injury ifthe unfair competition continues.

Elvey, on his own behalf and behalf of the other California Resident Class members, seeks an order enjoining TO AmeriTrade's unfair competition alleged herein, and restitution of property gained by such unfair competition under the UCL ( Cal. Bus. & Prof. Code § 17203).

Count ill: Breach oCFiduciary Duty
66.
Plaintiff incorporates the above allegations by reference.

67.
TO AmeriTrade owed all California Resident Class members a fiduciary duty.

68.
TO AmeriTrade breached its fiduciary duty of confidentiality by allowing the exposure of its accountholder's email addresses to spammers.

69.
TO AmeriTrade breached its fiduciary duty of loyalty and duty to inform by 1) its continued failure to correct the deception created by the Privacy Statement, and 2) its failure to disclose the events that led to the exposure of its accountholders' email addresses to spamrners, and 3) instructed accountholders to destroy Traced Spam.

70.
Elvey and the other California Resident Class members have sustained injuries from TO AmeriTrade's breach of its fiduciary duties.

71.
Elvey, on his own behalfand behalfofthe other California Resident Class members, seeks damages in an amount to be determined at trial and equitable relief (including an accounting, and disgorgement ofprofits obtained while the breach of fiduciary duty was ongoing, such as commissions on trades), for TD Ameri'Trade's breach of its fiduciary duties.

Count IV: Violation oCCAN SPAM Act, 15 U.S.C. § 7704(a)(I)
72.
Plaintiff incorporates the above allegations by reference.

73.
Elvey and the other CAN SPAM Class members are "Internet access services" under the meaning of 15 U.S.c. § 7702(11).

74.
The Traced Spam violated 15 U.S.C. § 7704(a)(1).

75.
TO AmeriTrade originated the Traced Spam by providing its accountholder's email addresses to spammers and thereby initiated the transmission of the Traced Spam.

Class Action Complaint 16
1,

76. TO AmeriTrade violated 15 U.S.c. § 7704(a)(l).

77. Elvey and the other CAN SPAM Class members have sustained injuries from TD

AmeriTrade's violation of 15 U.S.c. § 7704(a)(l) and will suffer additional injury ifthe

unfair competition continues.

78. Elvey, on his own behalf and behalf of the other CAN SPAM Class members, seeks an

order enjoining TO AmeriTrade's violations of 15 U.S.c. § 7704(a)(l), statutory

damages for each Traced Spam to each CAN SPAM Class member, and reasonable

costs, including reasonable attorneys' fees under the CAN SPAM Act (15 U.S.C. §

7706(g)).WHEREFORE, Plaintiff prays that the Court enter judgment and orders in their favor

and against Defendant as follows: 15
(a) Certifying the action as a class action and designating Plaintiff and his 16 counsel as representatives ofthe California Resident Class, the CAN
SPAM Class; 17
(b) With respect to Counts I, II, and III, equitable relief for the California 18 Resident Class, including an order for accounting, an order enjoining the misconduct alleged herein, restitution of property gained by this 19 misconduct and disgorgement ofprofits obtained while the breach of
fiduciary duty was ongoing, such as commissions on trades; 20
(c)
With respect to Count III, damages in an amount to be determined at trial 21 for the California Resident Class;

d) With respect to Count IV, an injunction against further violations of CAN SPAM, statutory damages for each Traced Spam to each CAN SPAM 23 Class member, and reasonable costs, including reasonable attorneys' fees under the CAN SPAM Act, for the CAN SPAM Class; 24

(e)
Awarding pre-and post-judgment interest; and 25

(f)
Granting such other and further relief as the Court may deem just and 26 proper.

JURy TRIAL DEMAND
The Plaintiff hereby demands a trial by jury of all issues so triable.
Dated: May 31, 2007

Alan Himmelfarb LAW OFFICES OF ALAN HIMMELFARB 2757 Leonis Blvd Los Angeles, CA 90058 Telephone: (323) 585-8696 Fax: (323) 585-8198 consumerlaw1@earthlink.net
Scott A. Kamber Ethan Preston KAMBER & ASSOCIATES, LLC 11 Broadway, 22d Floor New York, NY 10004 Telephone: (212) 920-3072 Fax: (212) 202-6364 skamber@kolaw.com epreston@kolaw.com