A new study using industry data says that the rebates could be costing mutual funds, pension funds and ordinary investors as much as $5 billion a year, the New York Times reported today. The study was written by financial consulting firm Woodbine Associates and will be released this week. Woodbine said that the report was done independently, without support from industry participants. Some financial firms criticized Woodbine's calculations and said the cost to investors was overblown, but did not dispute that the potential for a conflict of interest exists. The study estimates that investors lost an average of four-tenths of a cent on each of the 1.37 trillion shares traded last year because of orders being sent to exchanges that were not offering the best final price.
