The SEC Charged That the NASD:

Since 1990 knew about improper cooperation among dealers to boost their profit margins but did nothing to stop it

* Ignored hundreds of formal complaints that dealers failed to honor their publicly quoted prices

* Ignored evidence that the public was being denied accurate information about market demand because dealers were flouting strict rules that require prompt public reporting of trades

* Used its own disciplinary proceedings to harass dealers who tried to improve prices for customers, rather than filing cases against firms that violated the basic trading rules

According to the Agreement, the NASD Must:

* Spend $100 million over five years to prevent abuses and enforce basic trading rules

* Establish a computer audit trail that will track the handling of each order

* Adopt a rule expressly forbidding dealers from coordinating with each other in setting quoted prices or in handling and reporting trades

* Maintain an independent audit staff that has authority to review all aspects of the NASD’s business