The Financial Industry Regulatory Authority has launched an inquiry into the trading profits of Wall Street firms in an attempt to beef up scrutiny of the bond markets, the Wall Street Journal reports. The self-regulator has also expanded its probe into the way new offerings are allotted to investors.
FINRA is combing through trading data to see whether there are any instances where brokers are earning unusually large profits on bond trades, the regulator’s chairman and Chief Executive Officer Richard Ketchum told the Wall Street Journal. This inquiry could result in regulatory instructions to banks to narrow the spreads between buying and selling prices they charge on certain trades. In some cases, it could lead to enforcement action.
