Schumer Seeks SEC Probe Of Maker-Taker System

Law360, New York (May 10, 2012, 2:13 PM EDT) -- Securities brokers who profit by routing trades through preferred exchanges in return for rebates are costing investors up to $5 billion per year, Sen. Charles Schumer, D-N.Y., said Thursday, demanding regulators investigate conflicts of interest in the so-called maker-taker system.

Schumer published a letter to U.S. Securities and Exchange Commission Chairwoman Mary Schapiro threatening to draft legislation that would require all such payments be passed back to investors — or so-called market principals.

"The commission has not taken any action to improve order routing practices or...
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