The Justice Department and Nasdaq Stock Market's parent company reached agreement Wednesday to settle a dispute involving records the government wants for an investigation of Nasdaq dealers.
The National Association of Securities Dealers Inc. agreed to turn over by Dec. 15 records that the Justice antitrust division requested in a civil subpoena issued earlier this year. The NASD also agreed not to raise legal objections concerning Justice's jurisdiction over the case or future civil subpoenas on the Nasdaq probe.The settlement has been forwarded to U.S. District Judge Robert Sweet in Manhattan for his signature. On Oct. 23, the Justice sought a federal court order to force the NASD to turn over a variety of records, including computer data, for its investigation of Nasdaq dealers and their alleged collusion, boycotts and refusals to deal with smaller firms.
The Justice investigation began after a 1994 academic study suggested Nasdaq market makers colluded to keep buy and sell prices in Nasdaq stocks artificially wide. Market makers - major firms such as Goldman Sachs & Co. - play a central role on Nasdaq by buying and selling stocks for their own account as well as processing customer orders.
Justice contended that over the past year, the NASD missed a series of deadlines to turn over a variety of computer records.
NASD spokesman Marc Beauchamp said the association has maintained all along that it was cooperating with the Justice Department request.
"We provided them with over 1 million pages of documents" prior to the court action, Beauchamp said.
Justice spokeswoman Gina Talamona said since the agency's court filing, the NASD turned over more than a half-million pages of documents.