Wednesday, April 16, 2014

Charles Schwab Is Screwing Its Customers

Shares of E*Trade Financial Corp. , Charles Schwab Corp. and TD Ameritrade Holding Corp. tumbled last week amid concerns that regulators would ban a practice that allows brokerages to collect hundreds of millions of dollars a year in revenue by selling orders to middlemen who use high-frequency strategies to trade with the brokers' customers.

The practice, called payment for order flow, has gained more attention since the release of "Flash Boys," a book by Michael Lewis that argues the markets are "rigged" to benefit high-frequency traders, allegations that are stirring up long-running questions about the fairness of markets.

Fallout From Speedy-Trading Flap Hits Brokers

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