Wall Street Settlement Talks Hit Snag

A key regulator involved in Wall Street’s $1.5-billion settlement of alleged wrongdoing said Wednesday that her goal was to have an accord ready for final approval by the end of March. But the official, Maine’s Christine Bruenn, added that negotiations with individual states had been fierce and may drag on.

An agreement between state and federal regulators and 12 brokerages was initiated in December, but lawyers are haggling over the wording of a final settlement, which could arm investors suing the firms.

Bruenn, Maine’s securities chief and president of the North American Securities Administrators Assn., said there had been “fierce back-and-forth” between the two sides, making it tough to estimate when proceedings will conclude.

The brokerages, including Merrill Lynch & Co., Citigroup Inc.’s Salomon Smith Barney and Goldman Sachs Group Inc., will neither deny nor admit wrongdoing, as is typical in such settlements. But their lawyers are being careful to make sure that the final pact doesn’t provide legal ammunition for private suits, sources said.

Angry investors have sued the firms, alleging that their research during the bull market was misleading, overly bullish and geared to winning fee-rich underwriting deals.

Bruenn said the two sides were hashing out how regulators will describe their investigations, including conclusions of what rules had been violated.