TD Ameritrade proposed settlement of data theft case was declined by a judge

 A class-action settlement over contact information stolen from online brokerage TD Ameritrade was rejected by a federal judge. U.S. District Judge Vaughn Walker in San Francisco claimed that the settlement is more to the advantage of Ameritrade and the plaintiffs' lawyers rather than benefiting affected customers.

Walker declined the deal in spite of the fact that earlier this year it was preliminary approved. According to his view the deal appeared to do more for Ameritrade and for the plaintiffs' lawyers, who were set to receive nearly $1.9 million in legal fees, than it did for the victims.

Meantime, Ameritrade spokeswoman Kim Hillyer and one of the lead plaintiff's attorneys, Scott Kamber both stated that the deal could benefit members of the class. The breached database included information on 6.2 million current and former customers.

"What we offered the clients directly addressed the issue of unwanted spam," Hillyer said.

"We remain committed to ensuring that the class realizes a benefit as a result of this litigation," Kamber said.

According to the proposal of Ameritrade the three main benefits were to hire someone to test its security systems, to retain an outside expert to check for evidence of widespread identity theft and cover the cost of one year of anti-spam service for the victims.

Ameritrade did not admit any wrongdoing in the case. The company officials have stated that data theft has not been linked to cases of identity theft. It admitted that it stored sensitive information including Social Security numbers and account numbers, in the database that was hacked. Still, the company claims that information does not appear to have been taken.