Schwab Rival Says It’s Sorry Over Ads
Discount brokerage TD Waterhouse Group Inc. on Wednesday apologized to rival Charles Schwab Corp. and said it would stop running a series of TV advertisements that Schwab called unfair and misleading.
The steps, announced in a brief joint statement, came as part of a settlement of a lawsuit by San Francisco-based Schwab alleging that the ads unfairly linked its pricing and commission structure with full-commission brokerage firms.
On March 14, Schwab sued Waterhouse in San Francisco County Superior Court over several ads that featured actor Sam Waterston, a star of the popular NBC TV show “Law and Order.”
In at least one ad, Waterston draws an unfavorable comparison between Schwab’s transaction fees and those of higher-end brokerages such as Merrill Lynch & Co. and says Waterhouse’s fees are lower than theirs.
In their joint statement, the companies said the ads “may have created negative impressions about the quality of Schwab’s customer service.” They said they settled the suit in order “to move forward with their business without the distraction and expense of litigation.”
In the suit, Schwab alleged that Waterhouse at one point agreed to discontinue the ads but instead ran them “at least 28 additional times.”
The suit originally sought an unspecified amount in damages. Schwab declined to say whether the settlement included any payment. Schwab shares fell 22 cents to $11.21.
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