What is it called when a broker-dealer contacts another broker-dealer to buy OTC stock, instead of buying it directly from a market maker?

The scenario described occurs when a broker-dealer reaches out to another broker-dealer to facilitate a purchase of over-the-counter (OTC) stock rather than executing the trade directly with a market maker. This practice is known as interpositioning.

Interpositioning can sometimes lead to increased costs for the client because it adds another layer of brokerage to the transaction, potentially leading to wider spreads between the bid and ask prices. It raises concerns about whether it serves the client's best interests or if it is done to generate additional commissions for the brokers involved.

The other concepts mentioned, such as churning, price manipulation, and market arbitrage, involve different practices that do not relate directly to the action of involving another broker in an OTC trade. Churning refers to excessive buying and selling of stocks by a broker to generate commissions, price manipulation involves artificially inflating or deflating the price of a stock, and market arbitrage exploits price differences between markets to secure profits. Thus, the term that accurately describes the situation in question is interpositioning.