NEW YORK, June 6, 2016 /PRNewswire/ -- Faruqi & Faruqi,
LLP, a leading national securities law firm, is investigating
potential misconduct at E*Trade Financial Corp. ("E*Trade" or the
"Company") (Nasdaq:ETFC).
The investigation focuses on whether the Company's Board of
Directors and/or its officers committed mismanagement and breached
their fiduciary duties for failing to establish and/or maintain an
effective system of internal controls. On June 2, 2016, the Financial Industry Regulatory
Authority ("FINRA") issued a press release announcing that it had
censured and fined E*Trade Securities LLC ("E*Trade Securities"), a
wholly owned subsidiary of the Company, a total of $900,000 for failing to conduct an adequate
review of the quality of execution of its customers' orders and for
supervisory deficiencies concerning the protection of customer
information.
According to the press release, E*Trade Securities provides
online securities investing and trading services for retail
customers, and routes its customers' orders to various exchanges
and non-exchange market centers. Firms routing customer orders are
required to assess the quality of competing markets to which it
directs order flow and periodically conduct "regular and rigorous
reviews" of the quality of the executions of its customers' orders
to determine whether any material differences in execution quality
exist among the markets trading the security. In an effort to
comply with the foregoing, E*Trade established a Best Execution
Committee (the "BEC") to review execution quality it received on
its customers' orders.
FINRA found that, the BEC (i) lacked sufficiently accurate
information to reasonably assess the execution quality it provided
its customers; (ii) failed to take into account internalized order
flow sent to its affiliated broker-dealer market maker G1 Execution
Services ("G1X"); and (iii) failed to adequately consider the
actual execution quality provided by the market centers to which it
routed orders.
In addition, E*Trade Securities regularly accepted requests from
G1X to change prioritization in E*Trade Securities' order routing
system and to redirect certain order flow, without determining
whether these changes would improve the quality of execution
received by its customers. Finally, FINRA also found that
E*Trade Securities did not have adequate systems and controls in
place to ensure that there was no misuse of confidential customer
order information by individuals dually registered with E*Trade
Securities and G1X.
Request more information now by clicking here:
www.faruqilaw.com/ETFC. There is no cost or obligation to
you.
Take Action
If you currently own E*Trade stock and would like to discuss
your legal rights, please visit www.faruqilaw.com/ETFC. You can
also contact us by calling Stuart
Guber toll free at (215) 277-5770 or by sending an e-mail to
sguber@faruqilaw.com. Faruqi & Faruqi, LLP also encourages
anyone with information regarding E*Trade's conduct to contact the
firm, including whistleblowers, former employees, shareholders and
others.
Attorney Advertising. The law firm responsible for this
advertisement is Faruqi & Faruqi, LLP (www.faruqilaw.com).
Prior results do not guarantee or predict a similar outcome with
respect to any future matter. We welcome the opportunity to discuss
your particular case. All communications will be treated in a
confidential manner.
FARUQI & FARUQI, LLP
685 3rd Avenue, 26th Floor
New York, NY 10017
Attn: Stuart Guber
sguber@faruqilaw.com
Telephone: (215) 277-5770
Attn: Nina Varindani
nvarindani@faruqilaw.com
Telephone: (212) 983-9330
Logo -
http://photos.prnewswire.com/prnh/20120119/MM38856LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/faruqi--faruqi-llp-is-investigating-etrade-financial-corp-etfc-on-behalf-of-its-shareholders-300280063.html
SOURCE Faruqi & Faruqi, LLP