Nasdaq Giant to Pay $1.5 Million Settlement

Knight Trading Group Inc., the largest dealer on the Nasdaq Stock Market, agreed to pay $1.5million to settle regulatory charges that it repeatedly violated trading rules.

The penalty is the largest ever assessed by the National Assn. of Securities Dealers for computer-related offenses. Knight Trading violated securities laws and NASD rules from July 1997 to May 2001, including failure to honor posted quotes and failure to promptly display customer orders, the NASD said.

Jersey City, N.J.-based Knight Trading also had inadequate supervisory procedures, the regulatory order said.

The company’s stock fell 38 cents to $13.28 on Nasdaq.

Knight, which neither admitted nor denied wrongdoing, said its shortcomings were largely technical and reflected many firms’ problems in coping with a surge in online trading.