SEC probing Merrill on "front running": report
NEW YORK (Reuters) - Regulators are investigating whether several current and former employees at Merrill Lynch & Co Inc MER.N improperly placed trades for the brokerage house's own account ahead of client orders, The Wall Street Journal reported on Monday.
A Merrill Lynch representative was not immediately available for comment.
The report, quoting people familiar with the matter, said the U.S. Securities and Exchange Commission would look into whether some employees improperly stepped in front of orders placed by mutual fund operator Fidelity Investments to gain an unfair advantage.
The practice, called "front-running", takes advantage of the big stock moves that follow orders from big investment houses, such as Fidelity, to make a profit.
The period under scrutiny covers 2002 through 2005, the report said.
The SEC last year began investigating Merrill's subprime mortgage portfolio following the company's report of a $2.3 billion loss for the third quarter.
(Reporting by Ritsuko Ando, editing by Will Waterman)
