{"id":4456,"date":"2007-06-16T12:45:01","date_gmt":"2007-06-16T12:45:01","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2007\/06\/wall_street_wars_payback_by_se_1"},"modified":"2021-09-20T15:41:32","modified_gmt":"2021-09-20T20:41:32","slug":"wall-street-wars-payback-by-se-1","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/wall-street-wars-payback-by-se-1\/","title":{"rendered":"Wall Street Wars: SEC Chairman’s “Payback” to Investment Advisors?"},"content":{"rendered":"

\t\t\t\tLast year, money managers directed a billion in dollars of their clients’ funds in hidden commissions to Wall Street investment firms, says SEC Chairman Christopher Cox. These “soft”dollars” are purportedly for research and other services. Instead, the funds are made available to the money managers who often use these for “lavish trips, theater tickets, and fancy meals,” Cox added.<\/p>\n

In these “soft dollar” transactions, clients of investment advisers pay an extra five cents or so per share which is credited to cover costs of research and other services of the firm handling the transaction. A nickel per share may seem small, but on tens of billions of total shares traded becomes a huge amount. Those paying these costs include investors into mutual funds, pension funds, and 401(k) plans.<\/p>\n

Laws impose a “fiduciary duty” on money managers to protect their clients’ interests, even over their own. Yet, a “safe harbor” was enacted in 1975 which allows the managers and brokerage firms to “bundle” research and other services with executions and not be liable for violating duties to their clients, including the duty to shop for the best execution price. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

Last year, money managers directed a billion in dollars of their clients’ funds in hidden commissions to Wall Street investment firms, says SEC Chairman Christopher Cox. These “soft”dollars” are purportedly for research and other services. Instead, the funds are made available to the money managers who often use these for “lavish trips, theater tickets, and […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3825,3801],"tags":[],"class_list":["post-4456","post","type-post","status-publish","format-standard","hentry","category-financial-advisers","category-sec"],"yoast_head":"\nWall Street Wars: SEC Chairman's "Payback" to Investment Advisors? — Investor Lawyers Blog — June 16, 2007<\/title>\n<meta name=\"description\" content=\"Last year, money managers directed a billion in dollars of their clients' funds in hidden commissions to Wall Street investment firms, says SEC Chairman — June 16, 2007\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/wall-street-wars-payback-by-se-1\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Wall Street Wars: SEC Chairman's "Payback" to Investment Advisors? 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