For instance, promptness is one of the dimensions of the duty of best execution, and any deliberate and potentially gameable bumps in either executing customer orders or marking them up would be contrary to this stringent standard.
Moreover, the SEC itself recently penalized another major player, KCG, for its off-exchange market making activities in "pink sheets" stocks based on breaches of the duty of best execution, which KCG voluntarily assumed.
Takeaway: The duty of best execution, requiring advisers to obtain the best terms reasonably available under the circumstances, applies to both share class selection and broker-dealer selection (among other areas).
The Commission, pointing to the fact that the adviser did not seek competitive bids for the executions and that dozens of transactions involved commissions that were higher than industry norms, concluded that the adviser violated his duty of best execution and ordered him to disgorge $265,263.60 in excessive commissions, and to pay prejudgment interest and a civil money penalty of $75,000.
Furthermore, the overlap between HFT and off-exchange market making is important because it typically involves agency-based functions and thus the necessity of complying with the duty of best execution, despite the common perception that HFT firms have no customers.
The Commission has brought a number of cases alleging that investment advisers violated their duty of obtaining best execution by recommending share classes that paid them a higher level of compensation and cost their customers more than comparable lower-fee share classes offered by the same fund family.
"He was as clear in his judgment and as earnest in his convictions as he was efficient and indomitable in the performance of his duties and the execution of his designs.
There are also questions of execution.
It was just a lack of execution".
He once came within weeks of execution.
