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Schumer Faces Off with Cox

Cox Queried on His Recent Stance on Soft Dollars

Traders Magazine, September 2007

Peter Chapman

On July 31, Securities and Exchange Chairman Christopher Cox testified before the Senate Banking Committee. Among the many issues broached was soft dollars. Two months prior, Cox had sent letters to the Senate banking and House financial services committees imploring representatives to "consider legislation that would repeal or substantially revise Section 28(e)." That is the section of the Securities Exchange Act of 1934 that permits money managers to use their customers' commission dollars to pay for research. The letter was unexpected and unwelcome in many quarters of Wall Street and Washington. Most industry executives and legal types had believed the soft dollar issue was mostly closed after the SEC issued an "interpretation" last July clarifying and narrowing the definition of research. Sen. Charles Schumer (D-N.Y.), a member of the

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