SAN FRANCISCO: Charles Schwab has filed a lawsuit accusing TD Waterhouse Group, a competing brokerage firm, of a "pattern of deceptive, misleading, and patently false advertising."
The suit centers on a series of ads positioning TD Waterhouse as a more affordable alternative to Schwab and other firms. An early ad in the campaign featured TD Waterhouse spokesman Sam Waterston, star of NBC's hit drama Law & Order.
Greg Gable, Schwab's SVP of corporate PR, said, "They were claiming that Schwab's prices were as high as full-commission firms like Merrill Lynch, and of course that's not true."
Gable said that for an average client with $60,000 in assets, trades with Schwab are cheaper than those with TD Waterhouse.
The suit seeks an end to all of TD Waterhouse's comparison-based ads, as well as unspecified damages.
Kevin Dinino, head of media relations for TD Waterhouse, noted that the firm changed its ad tagline last year to "the alternative to Schwab and higher-priced brokers like Merrill Lynch" in a move intended to make clear that Schwab itself is not a "higher-priced broker." The change was part of a written agreement with Schwab in March 2004. "The suit's pretty much meritless," Dinino said. "It's just a way for them to generate some publicity."
Both brokerage firms said that they are handling all the litigation-related communications in-house.