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TD Ameritrade won a case claiming it broke securities laws, but it was one of those victories a company doesn't usually advertise.
That's because the federal appeals court dismissed the case on jurisdictional grounds. The factual allegations -- that the company got kickbacks to the detriment of customers -- are part of the permanent record.
Maybe court files and the internet aren't forever, but it sure feels like it when your business reputation or value goes down. Here are some lessons corporate counsel can learn from Zola v. TD Ameritrade.
The Customer is First
The service industry says the customer is always right, but they're just saying that to make customers happy. In the TD Ameritrade case, the truth is that the customer's interests should have been first.
According to the complaint, the company sent clients to traders that paid the most in kickbacks rather than to venues that provided the best service. Even though the court threw out the lawsuit, the revelation still hurt.
Whether TD Ameritrade gets kickbacks or not, the story is more powerful than advertising. A company's value always goes down when it gets sued -- especially in the age of instant communications.
At it's core, it's really a story about ethics. Lawyers have to advise corporate clients to act ethically or face the consequences, like the billion dollar mistakes of General Motors.
Reputation is Most Valuable
Shakespeare wrote much ado about the value of reputation, but Publilius Syrus said it more simply (albeit in Latin): "A good reputation is more valuable than money."
If a reputation is worth building, it's worth protecting. To avoid reputational risk, general counsel should have a game plan, practice crisis control, and keep issues from boiling over.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.