The US Securities and Exchange Commission is conducting a preliminary investigation into allegations that more than a dozen leading US brokerages executed stock trades in such a way as to disadvantage their customers.
Speaking to Reuters on condition of anonymity, a source close to the matter confirmed that:
"The behaviour was uncovered by the Office of Compliance, Inspections and Examinations, which sent letters of deficiency to about a dozen firms in the last two weeks. The Office of Compliance also made referrals to the SEC's enforcement division to investigate."
The New York Times, meanwhile, has alleged that among the brokers facing regulatory scrutiny are Morgan Stanley, Merrill Lynch, Ameritrade, Charles Schwab, and E-Trade Financial.
One of the questionable practices reported to be under investigation is the execution of buy and sell orders using shares from the brokers' own inventories when a better price is available elsewhere.
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