Scottrade is a privately owned American discount brokerage firm that operates both online and at retail locations. The company was founded in 1980 by Rodger O. Riney, its CEO.
<h2>History
In 1980, Rodger O. Riney founded Scottsdale Securities as a retail discount brokerage; the company moved to St. Louis in 1981. The company offered no investing advice or analysis and took orders over the phone or in person.
In 1996, Scottsdale Securities began offering brokerage services online; the new service increased the volume of trades the company managed by an average of 15% per month.
By 2000, more than 90% of the company’s trades were made online and the company name had been changed to Scottrade to reflect its website name. The company's annual revenue reached $212 million at the height of the dot-com bubble in 2000 and slumped in the following two years. Scottrade remained committed to expanding both its online and retail offerings. It began offering Chinese-language services in its retail locations in 2001 and in 2003 made its online offerings available in Chinese. It also continued setting up new retail operations, usually simple, small offices in strip malls; from 2000 to 2004 it doubled its retail branches, reaching 211 in 2004. It also invested in marketing, spending $30M in 2003 and around $40M in 2004. By 2003 its revenue had recovered and was $224M, and 98% of its customers trades were made online. In 2004, Scottrade bought an office building outside of St Louis next to its call center to house its corporate offices.
In 2006, Scottrade purchased the naming rights for the St. Louis Blues' stadium, which was renamed the Scottrade Center.
In 2008, the Securities and Exchange Commission charged the company with making fraudulent misrepresentations to clients about their Nasdaq pre-open orders in violation of the Exchange act. Scottrade consented to the entry of an Order by the SEC that censured Scottrade, agreed to stop committing or causing any violations of the act; and paid a civil penalty of $950,000.
In January 2014 Scottrade admitted to violating the recordkeeping requirements for federal security laws. The commission submitted a request for data describing its trades as part of an investigation into whether an account had been hacked and unauthorized trades made for a customer. Every brokerage firm is required to keep trading records under the law. Scottrade was missing data over a six-year period. As part of the settlement, Scottrade agreed to admit fault and pay a fine of $2.5 million.
In October 2015, Scottrade revealed that hackers accessed an encrypted database containing more than 4.6 million personal records of their clients including names, street addresses, email addresses, social security numbers, and other sensitive account data in late 2013 and early 2014. The company became aware of the breach when they were approached by Federal authorities who were investigating similar thefts at other financial service companies. As a precaution, Scottrade offered identity protection services to all affected customers.
After performing their own investigation of the breach, Financial Industry Regulatory Authority (FINRA) fined Scottrade $2.6 Million in November 2015 for failing to store financial records and emails completely and securely and to have an organized process for doing so; the company had failed to save over 168 million outgoing emails with trading information, which were instead deleted. Scottrade did not admit to or deny these charges, but consented to an entry of FINRA's findings and agreed to pay the fine.
The company had $1.11 billion in revenue in 2015.
In September 2016 Scottrade started exploring a sale of the business; the industry was consolidating at that time, and Scottrade, while profitable, was less profitable than its peers and revenue had not grown since 2014. In October 2016 the company and TD Ameritrade agreed that TD would purchase Scottrade for US $4 Billion; the deal was expected to close in September 2017.
See also
- Comparison of online brokerages in the United States
References
External links
- Official website
