Suit Against Nasdaq Dealers Dismissed : Securities: Plaintiffs alleged firms unfairly profited from wide price spreads. Judge cites lack of details; refiling expected.

A federal judge has dismissed a lawsuit alleging that the firms that match buyers and sellers on the Nasdaq Stock Market unfairly profited from wide spreads in the prices of the stocks bought and sold, according to court papers released Friday.

But his decision was partly based on a lack of details in the lawsuit, and both sides said they expect the plaintiffs to refile it soon.

The state of Louisiana and about 30 private investors had sued, charging that the market makers, who set the buy and sell prices for stocks sold via the electronic trading system, had unfairly benefited on trades executed between May, 1989, and May, 1994. The lawsuit was filed last year.

In addition to the lawsuit, the Justice Department has investigated alleged collusion to fix prices on Nasdaq, and the Securities and Exchange Commission has examined allegations of late reporting of trades, as well as traders backing away from quoted prices.

Some of the biggest firms on Wall Street were defendants in the case, including Goldman Sachs, Prudential Securities, Salomon Bros., Lehman Bros., Smith Barney and Merrill Lynch. Thirty-three firms were named in all.

U.S. District Judge Robert Sweet said that granting the defendants’ motion to dismiss was partly based on a lack of details related to the contested securities and trades.

His decision allows the plaintiffs to refile the complaint within 45 days.

Critics of the electronic market have charged that investors have lost as much as $1 billion a year due to unfair spreads between buy and sell prices on Nasdaq.

Unlike the New York Stock Exchange, where a single firm makes a market for a stock by buying from sellers or supplying buyers, on Nasdaq’s system, several brokerages compete to match buyers and sellers of a given stock. They profit on the spread between the buy and sell prices.

A spokesman for Nasdaq, which is not a defendant in the case, said the exchange was “gratified that the court reached this decision, because as we have consistently said, we believe this litigation is without merit.”