Tuesday, November 9, 2004

SEC Investigates Wirehouses for Best Execution Violations

The SEC is stepping up its problem of at least 12 firms including Merrill Lynch & Co. and Charles Schwab Corp., examining whether the brokers profited at customers' expense when trading Nasdaq stocks. The SEC is apparently investigating whether the firms obtained the best price for their customers.

According to press reports, the issue came to light during SEC audits, the SEC found that the brokers may have failed to obtain the best prices for customer trades in cases where the brokerages either ``internalized'' orders or were paid to route their orders to other firms.

Keep an eye on this investigation. With Spitzer upstaging the SEC at every turn, the SEC needs something to demonstrate to its handlers and the public that it is actually doing something, and this one might just be the ticket...whether it is true or meritorious, or not
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