Judge Says Institutions Can Join Nasdaq Suit

Institutional investors that traded on the Nasdaq Stock Market may join the class of individual investors suing 34 brokerages, alleging price-fixing on Nasdaq between 1989 and 1994, U.S. District Judge Robert Sweet in New York ruled. These institutional investors include many mutual funds, pension funds, profit-sharing accounts, banks, thrifts, insurance companies and investment advisors. Sweet said that if institutions were excluded from the class, they would probably file hundreds of individual suits against the brokerages. Among the defendants are Merrill Lynch & Co., Smith Barney Inc. and PaineWebber Group Inc. The 1994 class-action suit filed by individual investors accused the brokerages of colluding to keep trading “spreads” artificially wide on the nation’s second-largest stock market. “Spreads”--the difference between the “buy” and “sell” price of a stock--approximate dealer profit on a trade.