Matt Levine, Columnist

Don't Sleep on Your Trades With ConvergEx

You charge what you can convince people to pay you. The people who are easy to convince, generally because they're not paying attention, tend to pay more.

December 20, 2013 at 5:22 PM UTC

By Matt Levine

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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The Securities and Exchange Commission settled fraudaccusations on Wednesday against ConvergEx, a group of brokers that, in the SEC's words, "held themselves out to the public as a unified conflict-free agency broker that charged explicit commissions for equity order execution." Surprise! Most of those words were false!

The basic deal was that you hired ConvergEx to do some pretty boring but big equity trades,1and ConvergEx would do your trades for you on a purely agency basis and charge you a fixed stated commission. So you'd be like, "buy a million shares of Facebook," and ConvergEx would go buy a million shares of Facebook for your account and say, "okay we filled you at $55.05" or whatever and then charge you a penny a share for their trouble.