Wall Street is reportedly under investigation again for allegedly anti-competitive practices that regulators believe might put small investors at a disadvantage.
About 12 brokerages are the subject of a
Securities and Exchange Commission
probe into whether brokerages ensured that orders for
stocks were executed at the best possible price, primarily in the early minutes of trading,
The New York Times
reported Monday. The practices being probed are known as internalization and payment-for-order-flow.
Among the investment houses in the SEC's crosshairs reportedly are
The probe is the latest in a series of regulatory efforts to root out conflicts of interest that are sometimes inherent to Wall Street's centuries-old business practices. It follows campaigns by New York Attorney General Eliot Spitzer to end conflicted stock research and mutual fund pricing practices that helped savvy investors make sure-thing bets.
The latest probe comes amid a separate investigation into the way specialist middlemen operate on the
New York Stock Exchange
According to the
the SEC's investigation is looking specifically at internalization, in which a stock broker looks primarily at its own order book to match a buy or sell order, and payment-for-order-flow, in which market makers offer a commission to brokers to handle a stock trade.