Massachusetts Secretary of the Commonwealth William Galvin has subpoenaed Morgan Stanley and other brokerage firms to find out whether they disclosed to investors payments they received from insurance firms to sell their variable annuities.

Galvin called the practice "pay-to-play" and said that his office has also subpoenaed other companies related to these sales and that the National Association for Variable Annuities is also conducting its own investigation into annuity sales at Morgan Stanley.

The subpoenas come on the heels of Galvin's earlier investigation into mutual fund sales at Morgan Stanley and a lawsuit that an investor filed last month, accusing the firm of accepting kickbacks from insurance companies to promote a select group of variable annuities and other investments.

In addition, New York Attorney General Eliot Spitzer has launched an investigation of his own looking into whether insurance companies made secret payments to brokerage firms to encourage group policy sales.

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