A.G. Edwards said in a US Securities and Exchange Commission (SEC) regulatory filing that it had gotten such requests from the SEC, industry regulator NASD, and state officials in Massachusetts and Illinois, Reuters reported. The SEC also has examined certain company branch offices, the St. Louis, Missouri-based company said.
In the filing, the firm said Massachusetts regulators are also looking into the termination of two financial consultants.
The company, like other firms, said it uses the National Securities Clearing Corporation’s Fund/SERV system to submit and clear mutual fund orders.
The SEC has asked A.G. Edwards to review systems and controls for mutual fund orders to prevent late trading and to review all orders for a year to determine whether late trading in mutual funds occurred. “The review of mutual fund orders is still in progress,” the company said in the filing.
The brokerage house revealed that it has already changed certain trading policies and procedures resulting from its own in-house probes and the review asked for by the SEC. A.G. Edwards said it “is developing additional policies and procedures relating to the receipt and supervision of mutual fund orders.”
Federal and state regulators have been pursuing a wide-ranging investigation of the mutual fund industry since last fall, focusing on market timing, late trading and certain fund sales abuses.
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