A federal judge Monday approved a $1.03 billion class-action settlement between 37 brokerages and investors who alleged they were cheated by the firms in a price-fixing conspiracy involving Nasdaq-listed stocks.
The deal, which was brokered last December, is the largest civil antitrust settlement in history. The companies include the biggest names in the securities world, such as Merrill Lynch & Co., Goldman, Sachs & Co., and Salomon Smith Barney Inc.
The firms denied any wrongdoing.
The settlement follows government action to discipline the big trading firms for keeping stock prices artificially high, a practice that investigators said increased company profits and raised costs for investors.
As part of a civil antitrust settlement with the Justice Department, 24 of the 37 brokerages also have agreed to improve their compliance procedures and tape-record some phone calls made and received by traders.
The deal approved by U.S. District Judge Robert Sweet adds to the pressure on securities dealers to comply with civil agreements aimed at leveling the playing field in the Nasdaq stock market for big and small investors.
The Securities and Exchange Commission had censured the National Association of Securities Dealers, saying it broke federal securities laws and its own rules in failing to enforce the rules on the Nasdaq, the nation's second-largest stock market. The NASD agreed to spend $100 million over five years to improve market surveillance.
The SEC, the market watchdog agency, had accused major Nasdaq dealers of refusing to trade with others who tried to offer investors a better price for a stock as the powerful dealers colluded and tried to engage in price fixing.