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To: BORIS BADENUFF who wrote (11297)	11/11/1998 6:46:00 AM
From: BORIS BADENUFF	Respond to of 26163

*******************NEWS FLASH"************************************ Investor-Broker Settlement OK'd By Larry Neumeister Associated Press Writer Tuesday, November 10, 1998; 1:17 a.m. EST NEW YORK (AP) -- A lawyer who helped negotiate a record $1.03 billion settlement of a class-action lawsuit by investors over a price-rigging conspiracy for Nasdaq-listed stocks says people should not be shy about submitting a claim. ''You're talking about an enormous amount of money to be distributed, so I would encourage everybody to file when the time comes,'' said David J. Bershad, the lead settlement negotiator for the plaintiffs. U.S. District Judge Robert W. Sweet approved the deal on Monday, saying it was a fitting end to a lawsuit that might have led to a yearlong trial at great expense. Bershad said the lawyers expect to have a plan in place by early next year to distribute the money. He said claims must be filed to be eligible for payouts, but that it was hoped that claims could be filed directly over the Internet. Sweet credited an article by two professors for spawning more than two dozen investor lawsuits and a federal investigation that ultimately changed the computerized market. The article, ''Why do Nasdaq Market Makers Avoid Odd Eighth Quotes,'' by professors William G. Christie and Paul H. Schultz, was published in ''The Journal of Finance.'' ''This record-breaking result was achieved against formidable opposition,'' Sweet said, describing obstacles to a deal that is the largest civil antitrust settlement in history. Sweet said the lawsuits, which were ultimately combined in the class-action in Manhattan, were greeted in 1994 by skepticism from some world renowned economists, journalists and defense lawyers. The price-fixing allegations caught the interest of the federal government, leading to an April 22, 1996 consent decree that forced permanent changes in the operation of the Nasdaq, the nation's second-largest stock market. The companies making payouts in the deal approved Monday include the biggest names in the securities world -- Merrill Lynch & Co., Goldman, Sachs & Co., and Salomon Smith Barney Inc. The firms denied any wrongdoing. The judge awarded fees totaling $143 million for the lawyers representing more than 1 million individuals and institutions who were members of the class who bought or sold shares from May 1, 1989 to May 24, 1994. As part of a civil antitrust settlement with the Justice Department, 24 of the 37 brokerages agreed to improve their compliance procedures and tape-record some phone calls made and received by traders. The government had alleged that Nasdaq dealers engaged in a widespread practice of quoting stocks for customers to the nearest quarter of a dollar rather than the nearest eighth, thus giving themselves extra profits. The government was trying to end a practice in which some unscrupulous brokers would harass brokers who did not cooperate in their scheme or would refuse to deal with anyone who wasn't playing their game. Lawyers involved in the lawsuit told the judge that spreads are now 41 percent lower than they were at the start of this action. Lawyers built a case of unfair manipulation of prices for 1,659 different securities. By its end, the case included 3 million pages of documents, 10,000 hours of audiotapes and more than 200 depositions. The Securities and Exchange Commission also was prompted by the litigation to censure 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 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. SEC spokesman Duncan King declined comment, saying the agency wasn't involved in the class-action suit. Spokesmen for the NASD and the Securities Industry Association had no immediate comment. © Copyright 1998 The Associated Press Back to the top