Court Asked to Intervene in NASD Case; Justice Department Accuses Association of Delaying Its Investigation
The Justice Department today escalated a nine-month battle with the National Association of Securities Dealers (NASD) over release of documents about the Nasdaq Stock Market by asking a federal court here to intervene.</br></br>Justice Department lawyers investigating alleged anticompetitive conduct by Nasdaq market makers accused the beleaguered and understaffed association of playing "a waiting game that clearly will continue until this court compels compliance."</br></br>The department said it issued a civil investigation demand on Jan. 20 for what it called a limited look at "conduct among Nasdaq market makers, including possible collusion, boycotts and refusals to deal." Both the Justice Department and the Securities and Exchange Commission are trying to investigate claims that small investors suffer because Nasdaq's rules are written for the benefit of professional traders.</br></br>Marc Beauchamp, a spokesman for NASD, said the association was surprised by the department's filing of the court petition because "we have turned over in excess of half a million pages of documents and have met both formally and informally with the department to answer any of its concerns and questions."</br></br>NASD attorney F. Joseph Warin called the action against the association, which regulates stock brokers nationwide under a congressional charter, "unjustified and unnecessary." The Nasdaq Stock Market, the target of the department's investigation, is run by the NASD and handles trading in shares -- including those of many rising young computer and electronics companies -- not listed on older, larger stock markets.