The probe into “cash sweep” accounts comes as a number of companies have increased the interest they are paying clients. But the rates being offered to savers, particularly by the nation’s largest banks, remains far lower than the returns paid to banks based on short-term interest rates set by the Federal Reserve.
“You are talking about a big transfer of wealth from customer to brokerage firm,” said Robert Finkel, a senior partner at Wolf Popper, who filed a lawsuit in February against Morgan Stanley on behalf of customers over the issue. “It is in the billions of dollars that we are talking about.”