​ Reuters Covers Lawsuit Over Low-​Yielding Brokerage "​Sweep" Accounts. In what could be very bad news for brokerages with low-​rate bank sweep accounts, Reuters just posted a story "​Wachovia added to lawsuit over brokerage sweeps". Until now, only Investment News and Crane Data have covered the news, but the Reuters piece has already been picked up by several outlets. The lawsuit says Wachovia, Citigroup, Merrill Lynch, Morgan Stanley, and Charles Schwab "​automatically sweep cash into bank accounts that pay low rates, rather than money market or savings accounts yielding 4 percent to 5 percent." The potentially class-​action lawsuit claims that these accounts "cover about $​186 billion of client cash, and typically penalize customers with less than $​250,​000 or $​500,​000 in their accounts the most", says the Reuters story. The average brokerage sweep rate is 2.​77%, as measured by our Crane Brokerage Sweep Index while the average money market mutual fund rate is 4.​98%, as measured by the Crane 100 Money Fund Index (​the 100 largest money funds).

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