Regions

E*Trade plunges the most since April following Finra probe

August 7
9:24 PM 2013

E*Trade Financial Corp.'s stocks recorded its largest decline since April of this year following the online brokerage's statement that regulators were investigating the trading practices at two of its enterprises.

E*Trade fell by 3.4% to US$14.62 per share in today's trading. Last July 11, the Financial Industry Regulatory Authority informed E*Trade that it would examine the business practices at E*Trade Securities LLC and G1 Execution Service LLC. The information on the investigation came after the corporation's quarterly earnings report was filed yesterday.

E*Trade said it would sell the G1 Execution following its disclosure that the unit had shortcomings regarding the way the firm determined whether clients were receiving their trade's ideal prices. The market-making earnings were under pressure in America since the computerized exchange could squeeze margins.

Regulators said it "may initiate investigations into the company's historical practices which could subject it to monetary penalties and cease-and-desist orders, which could also prompt claims by customers of E*Trade Securities LLC," the corporation stated yesterday. "Any of these actions could materially and adversely affect the company's broker-dealer businesses."

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