The US Securities and Exchange Commission (SEC) is examining about a dozen US brokerage houses that may have failed to obtain the best prices while executing trades through internalization and payment for order flow methods.
Specifically, regulators are interested in the way the brokerage houses traded Nasdaq-listed stocks during early morning trade. The probe comes after the SEC examined four years worth of trade data that showed trades were often processed in ways that favored the firms over their clients, according to a Reuters report.
Even though the amount of money potentially given up by investors is small, the SEC is concerned about the bigger issue of how the trades were executed.