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Market-maker suit OK'd
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November 27, 1996: 4:24 p.m. ET
Judge certifies investors lawsuit against market makers as class action
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NEW YORK (CNNfn) -- Investors who filed suit against 33 Nasdaq market makers who they claim rigged stock prices won a legal victory Wednesday when a federal judge certified their case as a class-action lawsuit.
The decision combines complaints against Merrill Lynch, Goldman Sachs & Co. and Bear Stearns into a single suit that could now cover as many as 6 million investors who bought or sold 1,600 different Nasdaq stocks from 1989 to 1994.
The Nasdaq stock market itself is not a defendant in the lawsuit.
Investors allege the market-makers engaged in a conspiracy to widen the spread on Nasdaq stocks, making it more likely that investors did not get the best price when they bought or sold their holdings.
The same allegations were made earlier by the U.S. Justice Department, the Securities and Exchange Commission and brokerage houses. A tentative price-fixing settlement on those charges was reached in July.
Arthur Kaplan, lawyer for one of the plaintiffs, said there is no estimate of just how much investors have allegedly lost, but he said it could run into billions of dollars.
Goldman Sachs and Bear Stearns would not comment on the certification. Merrill Lynch referred calls to its attorney who was not immediately available.
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