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To: CountofMoneyCristo who wrote (1987)	1/3/1999 11:40:00 PM
From: Tom R. Jones	Respond to of 5102

Off Topic: I found this in the Merrill Lynch annual report, but we all know this could never REALLY happen! <VVVBG> On July 17, 1996, the Antitrust Division of the United States Department of Justice filed a civil antitrust complaint against 24 NASDAQ market-makers, including a subsidiary of ML & Co. The complaint alleges that the firms vio- lated Section 1 of the Sherman Act through a "common understanding" to follow a "quoting convention" that the complaint asserts had inflated the "inside spread" (the difference between the best quoted buying price and the best quoted selling price on NASDAQ) in certain NASDAQ stocks. The complaint fur- ther asserts that this alleged conduct resulted in investors having to pay higher transaction costs for buying and selling certain NASDAQ stocks than they would have paid otherwise. At the time of the filing of the complaint, a proposed settlement of the action was announced pursuant to which the market-maker defendants in the action agreed not to engage in certain conduct. The settlement, which was approved by the court in April 1997, provides for, among other things, the monitoring and tape-recording by each of the market-maker defendants of not less than 3.5 percent (to a maximum of 70 hours per week) of telephone conver- sations by its over-the-counter desk traders; the provision to the Department of Justice of any taped conversation that may violate the terms of the settle- ment; and allowing Department of Justice representatives to appear unannounced during regular business hours to monitor trader conversations. On May 20, 1997, the plaintiffs in the NASDAQ antitrust litigation class action described above, who had been granted limited leave to intervene in the civil antitrust action filed by the Antitrust Division of the Department of Justice in order to object to certain aspects of the settlement of such action, filed an appeal of the court's approval of the settlement. On May 21, 1997, the court stayed certain portions of its order approving the settlement, including the provision for the tape recording of telephone conversations by defendants' over-the-counter desk traders, pending completion of this appeal. In connection with its industry-wide investigations into the NASDAQ market, ML & Co., along with the other named defendants, have received inquiries from the SEC and is cooperating with these inquiries.