SEC Inquiry Looks Into 'Front Running' Trades
The Securities and Exchange Commission says it's getting lots of complaints from mutual fund companies that information about their trades is getting leaked ahead of time. As a result, people are profiting illegally from the leaks.
To determine whether some big Wall Street banks are involved, SEC officials have asked nearly a dozen brokerage firms for trading records and other documents.
The SEC investigation is reportedly focusing on allegations that some firms are "front running," or using inside information to trade before clients make a big move in the market.
The focus is on all stock trades conducted during the last two weeks of September. Coming just before the end of the third quarter of the fiscal year, it's a time when Wall Street traders get especially desperate.
The SEC's Lori Richards says examiners are poring through a huge mound of financial data about many millions of stocks trades.
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