August 15, 2017 / 1:52 PM / 2 years ago

BRIEF-Massachusetts opens probe into broker-dealer kickbacks; sends inquiry letters to Fidelity, Schwab, Morgan Stanley, others

Aug 15 (Reuters) - MASSACHUSETTS HAS BEGUN AN INVESTIGATORY SWEEP OF BROKER DEALER ‘KICKBACKS,’ SECRETARY OF THE COMMONWEALTH WILLIAM GALVIN SAYS GALVIN SAYS HE HAS ANNOUNCED AN INVESTIGATION INTO BROKER-DEALER SALES PRACTICES GALVIN SAYS INQUIRY LETTERS HAVE BEEN SENT TO CHARLES SCHWAB, SCOTTRADE, TD AMERITRADE, FIDELITY BROKERAGE SERVICES, E*TRADE, EDWARD D. JONES AND MORGAN STANLEY GALVIN SAYS PROBE TO FOCUS ON PRACTICE OF ROUTING ORDERS TO EXCHANGES THAT OFFER REBATES, AND WHETHER THIS CREATES A CONFLICT THAT DEPRIVES INVESTORS OF BEST EXECUTION GALVIN SAYS THE REBATES ARE PAID BY EXCHANGES TO FIRMS THAT DIRECT ORDER FLOW TO THOSE EXCHANGES GALVIN SAYS THAT IF REBATES OR KICKBACKS CREATE A CONFLICT THAT DEPRIVE INVESTORS OF THE BEST DEAL, THEN THE PRACTICE MUST STOP

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