Recent criticism of high-frequency trading seems to have spooked investors in online brokers E*Trade Financial Corp. (NASDAQ: ETFC) and TD Ameritrade Holding Corp. (NYSE: AMTD). Shares both of them are dropping for the second day in a row.

High-frequency trading has come under intense scrutiny since the release of Michael Lewis’s book “Flash Boys,” which aims to expose how the method of trading has rigged the financial markets against the little guy. U.S. Attorney General Eric Holder, in testimony before the U.S. House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies on Friday, confirmed that the U.S. Department of Justice is investigating insider trading and high-frequency trading.

Also note that the scrutiny of high-frequency trading may be why the highly anticipated initial public offering of Virtu Financial has been delayed.

As for how this affects the online brokers, the speculation is that investigators will also take a look at issues such as payment for order flow. Restrictions on payment for order flow could have a significant impact on the revenue of the online brokers. E-Trade reportedly generated about $72.5 million worth of order flow revenue last year.

Since the close of trading on Wednesday, shares of E*Trade are down more than 12% and TD Ameritrade is around 8% lower. E*Trade was trading at $20.45 in mid-day trading Friday, in a 52-week range of $9.52 to $25.58. TD Ameritrade was at $30.78, and its 52-week range is $18.79 to $35.82.

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