Using multivariate regression analysis complemented with simple linear regression, I find that not only do current
fiscal year brokerage, clearing, and Exchange expenses affect commission and fees (CE) paid to the broker but also prior
brokerage, clearing, and Exchange expenses (BCE). Also, I find that Cash dividends are positively correlated with BCE
expenses as well as CE fees. This result is particularly interesting because it implies that brokers can influence commission and
fees by affecting the BCE expenses. This might also provide further reasons for agency problems to take place. Overall, this
paper contributes to the existing literature on the behavior of brokers and dealers and how they influence the stock market.
