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BOSTON (AP) - Massachusetts' top securities regulator is investigating whether leased office space and other services that investment banks provide to hedge fund traders have created a conflict of interest that could hurt investors.
Secretary of State William Galvin said in an interview Tuesday that Switzerland-based UBS AG was cooperating with his request for documents that he hopes will show whether hedge funds are paying higher than normal brokerage fees to compensate the investment bank for office space.
Galvin declined to say whether he had requested such information from banks other than UBS, or from hedge funds. But he said he was examining such lease arrangements industrywide, including services such as receptionists provided to traders in so-called "hedge fund hotels."
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