Mr. Griffin's questions prompted E*Trade to conduct an internal review into its handling of orders from customers of its online brokerage, including how it uses its own market-making business to execute those trades, according to people familiar with the discussions. E*Trade said a director's questions had prompted the inquiry but didn't identify the board member in its filing. An E*Trade spokesman declined to comment on the director's identity. According to one person familiar with the matter, Mr. Griffin, who joined E*Trade's board in 2009, raised concerns about the order-flow practices several months ago. Mr. Griffin has told people close to him that he is concerned about whether E*Trade customers are receiving the best execution on their trades, compared to what they might receive if outside firms handled the orders, according to people familiar with discussions about the matter. http://online.wsj.com/article/SB10001424052970203707604578094632231507790.html
E*Trade comments on the Best Execution review in their most recent 10-Q: We have initiated a review of order handling practices and pricing for order flow between E*TRADE Securities LLC and our registered market-maker. The review was prompted by questions raised by a member of our Board of Directors and was initiated at the request of our Chairman and General Counsel as a result of the questions raised. The purpose of the review is to ensure that E*TRADE Securities is providing âbest executionâ of customer orders and dealing appropriately with its affiliate under applicable regulatory standards. The review is being conducted by separate firms of outside broker-dealer and bank regulatory counsel and we have informed the applicable regulatory agencies of the review. Based upon the review to date, the firms have recommended that we implement changes to improve upon our standards, processes and compliance procedures. The Company agrees with these recommendations and is implementing them. http://investor.etrade.com/secfiling.cfm?filingID=1193125-12-446767