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, the Associated Press reports.

"Essentially, it is pay-to-play compensation to push certain products," Galvin told the AP in an interview, adding that his office has also subpoenaed other companies related to these sales. He declined to disclose the names of these companies or whether it is the insurance companies themselves. However, he did say that the National Association for Variable Annuities is also conducting its own investigation into annuity sales at Morgan Stanley.

Morgan Stanley issued a statement saying it is "confident" that its annuity sales practices are "appropriate."

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 against Morgan, accusing the firm of accepting kickbacks from insurance companies to promote a select group of variable annuities and other investments.

Ron Marron, a lawyer representing an investor who filed the complaint, said his client purchased a pair of variable annuities from Hartford Financial Services Group without fully disclosing fees or taking necessary steps to establish suitability.

Morgan went ahead with the sales despite questionable circumstances because Hartford offered under-the-table financial incentives, Marron charged.

In addition, New York Attorney General Eliot Spitzer is looking into whether insurance companies made secret payments to brokerage firms to encourage group policy sales.

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