Some of those market makers were paying for order flow, and they brought in business.
Ms. Kinney said the New York Stock Exchange would not pay for order flow.
When Susquehanna began paying for order flow, it captured the attention of other exchanges.
Mr. Madoff pioneered a controversial practice called "payment for order flow".
As spreads have shrunk over the last five years, payment for order flow has also decreased.
Now spreads have shrunk so much that payment for order flow may be eliminated.
But, since July, payment for order flow has become institutionalized in the equity options markets.
had been among the harshest critics of payment for order flow.
In October 1999, Susquehanna, a large specialist operating in different options on various exchanges, began paying for order flow.
Today the S.E.C. will announce a new study aimed at determining whether payment for order flow is causing problems.
Of the 29 firms the S.E.C. investigated, 17 "improperly emphasized payment for order flow in deciding where to send orders".
