Interpositioning

The unlawful practice of adding an extra broker/dealer as a principal on a trade, even if no service is provided. Typically, interpositioning is done as part of a mutual benefit strategy, sending commissions to the broker/dealer in exchange for referrals or other cash profit. This type of behavior occurs at the upper levels of trade between specialists and broker/dealers, hedge funds or other institutional accounts.


Interpositioning violates the Investment Act of 1940, which states that a money manager cannot do anything that intentionally defrauds or deceives a client. A wide-ranging case of interpositioning was found to have occurred among various specialists of the New York Stock Exchange in the 1999-2003 period; the SEC estimated that more than $150 million in customer harm was caused in the form of higher commissions and spreads.



Investment dictionary. . 2012.

Look at other dictionaries:

  • interpositioning — The practice of using a second broker in a securities transaction, which is considered illegal it is if used to generate additional commission. Bloomberg Financial Dictionary …   Financial and business terms

  • Gewaltfreie Intervention — Als gewaltfreie Intervention wird entgegen der humanitären Intervention das aktive gewaltlose Eingreifen von externen unparteiischen Dritten in einen gewaltförmigen Konflikt verstanden. Des Weiteren kann der Ausdruck auch eine Klasse von Methoden …   Deutsch Wikipedia

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