UPDATE 1-TD Ameritrade to return $456 mln to ARS investors

NEW YORK, July 20 (Reuters) - TD Ameritrade Holding Corp AMTD.O has agreed to return $456 million to investors holding illiquid auction-rate securities, New York's attorney general said on Monday.

Attorney General Andrew Cuomo also said his office was planning "imminent legal action" against Charles Schwab Corp SCHW.O over its sales and marketing of ARS.

Cuomo said his investigation stemming from last year's collapse of the market for these securities -- long-term debts whose rates are set at periodic auctions -- is continuing. (Reporting by Martha Graybow; editing by John Wallace)