Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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January 1, 1998

Nasdaq Settlement

By John A. Byrne

The dust is finally settling on the class-action lawsuit brought by thousands of investors alleging price-fixing among Nasdaq market makers. A $900 million settlement has been reached. The lawsuit was filed in U.S. District Court in Manhattan in 1994 against 37 firms, including two industry giants, Merrill Lynch & Co. and Goldman Sachs & Co., that are among 30 firms that settled. Six other firms settled their case earlier, agreeing to pay $98 million of the final settlement. The defendants neither denied nor confirmed any wrongdoing.

How the $900 million will be divided among the investors is unclear. Each named defendant that settled, however, will make payments based on their percentage of Nasdaq trading volume. Merrill and Lehman Brothers agreed to pay $100 million and $80 million, respectively, while J.C. Bradford & Co. and Furman Selz will each pay less than $10 million. A judge must still determine how plaintiffs' lawyers will be compensated.

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