Concerned that day-trading firms are failing to adequately advise and protect their traders from significant financial risk, the Securities and Exchange Commission, the regulatory unit of the National Association of Securities Dealers, and several members of the Senate are closely monitoring the practices of this sector of the financial industry.
Last week, the SEC and NASD brought enforcement actions against 10 day-trading firms, alleging violations of margin and lending rules, misleading advertising, misuse of funds and other securities law violations. The Senate Subcommittee on Permanent Investigations also chimed in last week, holding hearings to discuss problems in the day-trading industry and new rules that the NASD hopes to impose on day-trading firms.
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