Federal prosecutors are investigating whether the internal communication systems that broadcast confidential market information at several well-known Wall Street brokerage firms were misused to generate quick profit, people familiar with the situation said.

Among these big-named firms are Merrill Lynch & Co., Citigroup Inc.’s Smith Barney and Lehman Brothers Holdings Inc. Representatives from these companies refused to comment.

As previously reported, prosecutors from the U.S. Attorney’s office in Brooklyn, N.Y., and the Securities and Exchange Commission are examining a possible overhearing on information about big stock orders that is transferred over squawk boxes - the firms’ internal communications systems, according to the Wall Street Journal. It remains unclear whether investigators are examining possible leaks through other brokerage firms’ squawk boxes or how extensive improper trading might be.

The inquiry is part of a broader investigation into whether important market information has been misused. Last week a former New York Stock Exchange floor clerk was accused of selling information about customer orders to a day trader.

One key figure in the squawk-box scrutiny is day trader John J. Amore, the 42-year-old former chief executive of A.B. Watley Group Inc., a small New York brokerage firm. He is collaborating with the authorities, people familiar with the situation say. A lawyer for Mr. Amore refused to provide any comment.