Funds Fire Another Shot at TD Ameritrade

Updated from 12:39 p.m. EDT

Hedge fund agitators SAC Capital and Jana Partners have sent a third letter to TD Ameritrade(AMTD Quote) calling for change at the online brokerage firm.

Addressing the letter to both TD Ameritrade's CEO Joe Moglia and one of the company's top shareholders, Joe Ricketts, the hedge funds implored the Omaha, Neb., firm to allow its independent directors to take control of M&A discussions.

While SAC and Jana said they are "encouraged that TD Ameritrade has had and expects to continue discussions with industry peers regarding strategic combinations," they believe the online broker has not "taken adequate steps to address the conflicts of interest arising from the presence of directors," appointed by TD Bank," they said in the letter.

The letter, sent on Thursday, is just the latest in a month-long battle between TD Ameritrade and the funds, who own an 8.4% stake in the company.

In early June, SAC and Jana issued their first letter saying that they would like to see TD Ameritrade merge with one of its industry peers -- namely E*Trade Financial(ETFC Quote) or Charles Schwab(SCHW Quote).

At the time, they also pointed to "glaring conflicts of interest" between TD Ameritrade and its largest shareholder, TD Bank. The Toronto company owns a 40% stake in TD Ameritrade after last year's merger with TD Waterhouse, its U.S. brokerage operations.