Online brokerage stocks were hammered on Friday as investors digested claims of manipulated equities trading. E*Trade Financial (ETFC) stock fell more than 6%, while AmeriTrade (AMTD) shares sank more than 3%.
ETFC and AMTD stock fell after Charles Schwab (SCHW) posted a message on its website on Thursday describing high-frequency trading as a “growing cancer than needs to be addressed.” SCHW stock fell more than 3% on Friday.
In the message, SCHW said that it has monitored the rise of high-frequency trading with “great concern” and complained that the practice “has run amok and is corrupting our capital market system by creating an unleveled playing field for individual investors and driving the wrong incentives for our commodity and equities exchanges. “
SCHW mentioned Flash Boys, a new book by Wall Street reporter Michael Lewis, which alleges that major banks and trading houses use high-frequency trades to manipulate U.S. markets and produce huge profits.
ETFC stock closed at $22.11 on Thursday. Over the past year, ETFC stock has gained more than 115%. AMTD and SCHW shares have both climbed more than 60 over the past 12 months.
More “Rigged Market” News: