Sulja Bros. Building Supplies, Ltd (SLJB)

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ot:NEW YORK, March 1 (Reuters) - A subsidiary of E*Trade Financial Corp. (ETFC.O: Quote, Profile , Research) is being investigated by the U.S. Securities and Exchange Commission for its trading activities, the online brokerage said in a public filing on Thursday.

The SEC is conducting an inquiry into trading from 1999 to 2005 of specialist firms, including E*Trade Capital Markets LLC., the filing said.

The investigation is focused on securities regulations violations known as "trading ahead" -- which put public customers at a disadvantage by placing a specialist firm's dealer account between their buy and sell orders.

Potential sanctions could affect E*Trade's financial results, the filing said, adding the company was cooperating with the investigation.