{"id":6186,"date":"2017-08-18T21:13:33","date_gmt":"2017-08-19T02:13:33","guid":{"rendered":"https:\/\/www.institutionalinvestorsecuritiesblog.com\/?p=1724"},"modified":"2022-05-19T12:04:43","modified_gmt":"2022-05-19T17:04:43","slug":"massachusetts-regulator-galvin-investigates-whether-exchanges-giving-kickbacks-brokers-making-customer-trades","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/massachusetts-regulator-galvin-investigates-whether-exchanges-giving-kickbacks-brokers-making-customer-trades\/","title":{"rendered":"Massachusetts Regulator Galvin Investigates Whether Exchanges Are Giving Kickbacks to Brokers for Making Institutional Investor Trades"},"content":{"rendered":"<p>Massachusetts Secretary of the Commonwealth William Galvin is probing whether there are brokers who are getting paid kickbacks by exchanges in return for investor trades. The investigation comes in the wake of an op-ed article published in <em>The New York Times<\/em> last month alleging that there are financial representatives who have been sending orders to specific exchanges for these kickbacks, referred to as \u201crebates,\u201d even if it means poorer results for their institutional investors.<\/p>\n<p>The op-ed was written by Yale Law Professor Jonathan Macey and Yale University Chief Investment Officer David Swensen. Already, the state regulator has sent inquiry letters to Morgan Stanley &amp; Co. (MS), E*TRADE Securities, Charles Schwab &amp; Co. (SCHW), and Fidelity Brokerage Services LLC.<\/p>\n<p>According to the article, because of these \u201crebates,\u201d brokers are frequently selecting less favorable trades for their institutional investors clients to use these exchanges. If this is true, then it would be distressing considering that institutional brokers are legally bound to make trades on the exchange that has the terms that are most favorable for a client. Failure to do so could be grounds for a <a href=\"https:\/\/www.securities-fraud-attorneys.com\">securities case<\/a>. Meantime, it is supposed to be up to the exchanges, all 12 of them, to compete to provide the best trading opportunities.<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/massachusetts-regulator-galvin-investigates-whether-exchanges-giving-kickbacks-brokers-making-customer-trades\/#more-6186\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Massachusetts Secretary of the Commonwealth William Galvin is probing whether there are brokers who are getting paid kickbacks by exchanges in return for investor trades. The investigation comes in the wake of an op-ed article published in The New York Times last month alleging that there are financial representatives who have been sending orders to [&hellip;]<\/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":[3783,3752,3787],"tags":[],"class_list":["post-6186","post","type-post","status-publish","format-standard","hentry","category-broker-misconduct","category-financial-firms","category-morgan-stanley"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Massachusetts Regulator Galvin Investigates Whether Exchanges Are Giving Kickbacks to Brokers for Making Institutional Investor Trades &#8212; Investor Lawyers Blog &#8212; August 18, 2017<\/title>\n<meta name=\"description\" content=\"Massachusetts Secretary of the Commonwealth William Galvin is probing whether there are brokers who are getting paid kickbacks by exchanges in return for &#8212; August 18, 2017\" \/>\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\/massachusetts-regulator-galvin-investigates-whether-exchanges-giving-kickbacks-brokers-making-customer-trades\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Massachusetts Regulator Galvin Investigates Whether Exchanges Are Giving Kickbacks to Brokers for Making Institutional Investor Trades &#8212; Investor Lawyers Blog &#8212; August 18, 2017\" \/>\n<meta name=\"twitter:description\" content=\"Massachusetts Secretary of the Commonwealth William Galvin is probing whether there are brokers who are getting paid kickbacks by exchanges in return for &#8212; August 18, 2017\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards &amp; Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Massachusetts Regulator Galvin Investigates Whether Exchanges Are Giving Kickbacks to Brokers for Making Institutional Investor Trades &#8212; 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