Acknowledgements of probes by federal and state investigators into improper trading continue to drift in. The revelations are being made as firms include information about investigations in their regular quarterly reports to shareholders.
The receipt of information requests and subpoenas are typically considered to be material events that must be disclosed to shareholders. However, the information included in the filings is often bare bones in detail and the firms usually do not follow up with public comments on the matter.
The latest firm to make this kind of disclosure was KeyCorp. The Ohio-based bank said that McDonald Investments Inc. received subpoenas from the SEC, the NASD and New York Attorney General Eliot Spitzer's office. McDonald Investments is a brokerage subsidiary of the bank.
Last December KeyCorp closed a McDonald office in Chicago and fired seven of the office's 10 brokers for neglecting company policy, according to the bank. The firings came after KeyCorp reviewed trading practices in response to regulators investigating the mutual fund business.
The more requests were for documents and information relating to investigations into trading activity involving the mutual fund, brokerage and annuity businesses, according to the filing.
"It is not known whether, and then to what extent, McDonald could receive further requests or be required to take action related to this matter in the future," KeyCorp said.
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