TD Ameritrade 2018 Annual Report

19 damages or when investigations or legal proceedings are at an early stage. A substantial judgment, settlement, fine or penalty could be material to our operating results or cash flows for a particular period, depending on our results for that period, or could cause us significant reputational harm, which could harm our business prospects. In market downturns, the volume of legal claims and amount of damages sought in litigation and regulatory proceedings against financial services companies have historically increased. We are also subject to litigation claims from third parties alleging infringement of their intellectual property rights. Such litigation can require the expenditure of significant resources, regardless of whether the claims have merit. If we were found to have infringed a third-party patent or other intellectual property right, then we could incur substantial liability and in some circumstances could be enjoined from using the relevant technology or providing related products and services, which could have a material adverse effect on our business and results of operations. Risk Factors Relating to Acquisitions We may not realize all of the financial and strategic goals of our Scottrade acquisition. Risks we face in connection with our acquisition and continuing integration of Scottrade include that: • the Scottrade acquisition might not further our business strategy as we expected, we might not integrate Scottrade's business or technology as successfully as we expected, or we might have overpaid for Scottrade or otherwise might not realize the expected return on our investment to the extent or in the timeframe forecasted, which could adversely affect our business or results of operations; • we may not realize the benefits or cost savings anticipated to be derived from the Scottrade acquisition as initially predicted, if at all, for a number of reasons, including if a larger than predicted number of customers decide not to continue to use Scottrade's or our services; • our financial condition or results of operations could be adversely impacted by: claims or liabilities that we assumed fromScottrade or that are otherwise related to the acquisition, including claimsmade by government agencies, terminated employees, current or former customers, former stockholders or other third parties; contractual relationships of Scottrade that we would not have entered into but for the merger, the termination or modification of which may be costly or disruptive to our business; and intellectual property claims or disputes; and • we may have failed to identify or assess the magnitude of liabilities, shortcomings or other circumstances of Scottrade, which could result in unexpected litigation or regulatory exposure, unfavorable accounting treatment, unexpected increases in taxes, a loss of anticipated tax benefits or other adverse effects on our business, financial condition or results of operations. As a result of these risks and challenges, we may not realize the financial and strategic goals that we initially anticipated from the Scottrade transaction in a timely manner or at all. Acquisitions involve risks that could adversely affect our business. We may pursue other acquisitions of businesses and technologies. Acquisitions entail numerous risks, including: • difficulties in the integration of acquired operations, services and products; • failure to achieve expected synergies; • diversion of management's attention from other business concerns; • assumption of unknown material liabilities of acquired companies; • amortization of acquired intangible assets, which could reduce future reported earnings; • potential loss of clients or key employees of acquired companies; and • dilution to existing stockholders. As part of our growth strategy, we regularly consider, and from time to time engage in, discussions and negotiations regarding transactions, such as acquisitions, mergers and combinations within our industry. The purchase price for possible acquisitions could be paid in cash, through the issuance of common stock or other securities, borrowings or a combination of these methods.