Allegations of fabricated trade records and subsequent deletion from a customer’s brokerage account have led to a federal lawsuit seeking to preserve potential securities fraud claims under United States law. The complaint was filed by Jeff Huntington on April 14, 2026, in the United States District Court for the Eastern District of New York against TD Ameritrade, Inc. and Charles Schwab & Co., Inc., which is named as the successor-in-interest to TD Ameritrade.
According to the court documents, Huntington alleges that on or about April 15, 2024, three fictitious trades—referred to as “Phantom Trades”—appeared in his brokerage account interface with filled-execution status for a specific options contract (FIX April 19, 2024 $210 Put). The complaint states that these entries did not correspond to any actual market transactions or clearing records and were later removed from both his account interface and the defendants’ internal systems. "The Phantom Trades had the following characteristics, each of which is inconsistent with a legitimate market execution and consistent with fabricated internal records: (a) each Phantom Trade appeared in the Account interface with filled status visible to Plaintiff; (b) no Phantom Trade produced any change to Plaintiff's option holdings or position; (c) no Phantom Trade produced an Options Clearing Corporation ('OCC') clearing record; (d) no Phantom Trade produced a trade confirmation; (e) no Phantom Trade was reflected in any subsequent account statement; and (f) all three Phantom Trades subsequently disappeared entirely from Plaintiff's Account interface and from Defendants’ internal systems," the filing reports.
Huntington asserts that these actions violate Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. He further alleges that this incident was part of a broader pattern involving manipulative order-handling practices between 2022 and April 2024. The document describes repeated cancellations and rerouting of his limit orders through payment-for-order-flow arrangements with market makers such as Citadel Securities LLC and Susquehanna International Group LLP. On February 23, 2024 alone, Huntington claims his orders were cancelled or rerouted more than forty times in one day, resulting in unfavorable price movements compared to other platforms. "Plaintiff possesses contemporaneous video recordings of his trading screen documenting this disparity in real time," according to the complaint.
The complaint emphasizes that despite seven months of targeted discovery demands during ongoing Financial Industry Regulatory Authority (FINRA) arbitration proceedings—initiated by Huntington on January 3, 2025—the defendants have not produced mandatory electronic records required by federal securities law. These include order memoranda under SEC Rule 17a-3(a)(6), Consolidated Audit Trail data under SEC Rule 613, business communications under SEC Rule 17a-4(b)(4), customer complaint records under FINRA Rule 4513, SMARTS surveillance system alerts under FINRA Rule 3110, and FIX protocol message logs under SEC Rule 17a-4.
Huntington maintains that he only discovered evidence suggesting fabrication after observing the disappearance of these trades from his account on or about April 16, 2024. He argues that full awareness could not have been achieved until after defendants refused to produce required documentation during arbitration proceedings. The filing references Supreme Court precedent on discovery rules for fraud cases: "The full scope of the fraudulent character of the Phantom Trades...could not have been discovered by a reasonably diligent plaintiff until after...Defendants' sustained refusal to produce the mandatory records." To protect his right to pursue federal claims within statutory deadlines while arbitration continues, Huntington has filed this protective action within two years of discovering the alleged conduct.
The legal claim requests compensatory damages for direct losses not less than $2 million but believed to exceed $40 million when including lost profits, execution-quality losses, consequential damages from forced liquidations or expired positions due to alleged manipulation, disgorgement of payment-for-order-flow revenue received by defendants from market makers handling plaintiff’s orders, punitive damages intended as deterrence against similar conduct by others, pre-judgment and post-judgment interest at maximum rates allowed by law, reasonable attorneys’ fees and costs, as well as any other relief deemed appropriate by the court.
Huntington’s attorney is Lee Xu of Xu Law Offices P.C., based in Flushing, New York. The case is identified as Civil Action No. 1:26-cv-02206.
Source: 126cv02206_Huntington_v_TD_Ameritrade_Inc_Complaint_Eastern_District_New_York.pdf