Justice Department Investigating Citadel, KCG For Pricing To Retail Investors

By Markets MarketWatch Pulse

The Justice Department is investigating high frequency trading firms Citadel and KCG regarding the firms' routing of customer stock orders they've bought from large retail brokerage firms, according to a Reuters report on Tuesday. The authorities have subpoenaed information from the market-making side of the firms, and will look into whether small investors are getting unfair pricing when the firms execute stock transactions on their behalf, according to the Reuters report. The high speed proprietary trading firms say their technology delivers cheaper and more transparent trades to investors. Critics have alleged that firms with the fastest trading technology are using speed to manipulate stock prices, giving investors a bad deal.

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