Each day, Benzinga takes a look back at a notable market-related moment that happened on this date.
What Happened
On Nov. 9, 1998, a federal judge ordered 37 domestic brokerages to pay Nasdaq investors $1.03 billion for price fixing.
Where Was The Market
The S&P 500 closed around $1,130.20, and the Dow Jones Industrial Average closed around $8,897.96.
What Else Was Going On In The World
Amid the Lewinsky scandal, the U.S. House was preparing impeachment hearings for President Bill Clinton, and Deutsche Bank was weeks away from buying Bankers Trust to create the world’s largest financial institution.
Investors Celebrate Long-Awaited Pay Day
The largest civil antitrust settlement in U.S. history awarded defrauded investors after a lengthy class-action lawsuit. The plaintiffs had alleged a price-fixing conspiracy by brokerages such as Goldman Sachs Group Inc GS and Merrill Lynch BAC, who collectively denied wrongdoing.
The firms were found to have colluded to keep stock prices artificially high to increase company profits and investor costs. The Securities and Exchange Commission had accused them of refusing to deal with other Nasdaq traders who attempted to give investors better prices.
Following the lawsuit, 24 of the brokerages agreed to improve compliance procedures and record some trader calls to root out corruption. The National Association of Securities Dealers — accused by the SEC of failing to enforce rules on the Nasdaq — agreed to commit $100 million to improving market surveillance over the next five years.
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