It's in this sentence at the end of the wiki article:
"Some companies choose to have all of their funds swept into a sweep account..."
Some sweep accounts go back and forth in total every night, some only go back and forth according to funds being over or under a certain threshold.
Let's say your business on average has $10k in an account that doesn't earn interest, because legally the bank can't pay you interest on a business checking account. But, they want to pay you interest, because they want your business.
Every night, the bank "sweeps" the money from the checking account into an investment account that earns interest, then "sweeps" it back into the checking account. That way, they follow the law and you get interest on your funds. It's a completely legit paper trade, nothing more.
However, if this happens every night, and you have $10k in your account on average, then in a week the sweep account shows $70k in deposits, though you're true balance is only $10k.
If you have an Etrade stock account, you see the exact same thing happening between the cash in your account and a money market fund, all transactions marked with the word "sweep" in one form or another.
If prosecution merely added up the deposits in a back-and-forth sweep account to get the $425mil number, then it is a bit ridiculous to call it a "$425mil fraud".
"Some companies choose to have all of their funds swept into a sweep account..."
Some sweep accounts go back and forth in total every night, some only go back and forth according to funds being over or under a certain threshold.
Let's say your business on average has $10k in an account that doesn't earn interest, because legally the bank can't pay you interest on a business checking account. But, they want to pay you interest, because they want your business.
Every night, the bank "sweeps" the money from the checking account into an investment account that earns interest, then "sweeps" it back into the checking account. That way, they follow the law and you get interest on your funds. It's a completely legit paper trade, nothing more.
However, if this happens every night, and you have $10k in your account on average, then in a week the sweep account shows $70k in deposits, though you're true balance is only $10k.
If you have an Etrade stock account, you see the exact same thing happening between the cash in your account and a money market fund, all transactions marked with the word "sweep" in one form or another.
If prosecution merely added up the deposits in a back-and-forth sweep account to get the $425mil number, then it is a bit ridiculous to call it a "$425mil fraud".