The police here have dropped a years-long fraud and corruption investigation involving a major brokerage company after the firm, Tradition Financial Services, stopped cooperating with investigators, according to people familiar with the matter and correspondence reviewed by The Wall Street Journal.

The City of London Police, which investigates financial crime, opened a criminal investigation around 2011 into potential improprieties involving lavish spending and attempts to win overseas business by a number of Tradition brokers. Tradition had been cooperating with the investigation and has described itself to investigators as a victim of its former employees' fraudulent activity, the people said.