SECURITIES : Justice Seeks Court Order Forcing NASD to Turn Over Documents


The Justice Department on Monday accused the Nasdaq Stock Market's parent organization of refusing to turn over documents requested in the federal agency's pending antitrust investigation of Nasdaq dealers, and asked a federal court to order compliance.

The Justice Department's antitrust division filed the petition in federal court in Manhattan against the National Assn. of Securities Dealers. At issue is a massive request for documents, known as a civil investigative demand, that the agency served on the NASD in January. Justice Department lawyers said the NASD has dragged its feet since then, failing to comply with most of the request.

F. Joseph Warin, a lawyer with Gibson, Dunn & Crutcher, which is representing the NASD in the investigation, said in a written statement that "the Justice Department's surprise motion is unjustified and unnecessary." He said the dispute was over purely procedural issues and that the NASD has been cooperating with the investigation and expects to comply with the demands. Marc Beauchamp, spokesman for the NASD, said, "We have turned over literally truckloads of documents."

Since last year, the antitrust division has been investigating whether Nasdaq dealers have manipulated Nasdaq stock prices to increase their trading profits. The dealers have denied any wrongdoing. The Securities and Exchange Commission is conducting a separate investigation of Nasdaq and the NASD.

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