Antitrust Officials Probing BrokerTec

BrokerTec Global, an electronic bond brokerage owned by 14 Wall Street banks, said Friday that the Justice Department is investigating whether the company violated antitrust rules.

BrokerTec confirmed it received a civil investigative demand from the Justice Department and said it has responded to the request and will continue to cooperate completely.

Investigators may be looking at how BrokerTec gives dealers incentives to trade with the company, “including reduced commissions for higher levels of trading,” said Andy Nybo, a senior analyst at TowerGroup.

A civil investigative demand is similar to a subpoena. The Justice Department began investigating online trading systems in 2000 to determine whether the biggest banks were shutting out competitors.

Earlier this week, the Justice Department said it is looking at electronic currency trader FXall, owned by 17 Wall Street banks. The probe centers on whether the largest banks are gaining a stranglehold on electronic trading in the $1-trillion-a-day foreign-exchange market.

Jersey City, N.J.-based BrokerTec became one of the largest U.S. Treasury middlemen last year, and its owners are major banks that control most of the $3-trillion Treasury market. It matches buyers and sellers in dealer-to-dealer trades of government bonds and related securities.

Goldman Sachs Group to Buy Specialist Firm

Goldman Sachs Group Inc. will buy Walter N. Frank & Co., a Wall Street specialist firm that matches stock buyers with sellers for transactions on the New York Stock Exchange.

Goldman Sachs (ticker symbol: GS) did not disclose terms of the deal in its announcement. The transaction is subject to regulatory approval and other closing conditions.

Shares of Goldman Sachs Group rose 45 cents to $80.50 on the NYSE.

Associated Press