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Brokers' $1bn settlement cleared

DEAL that will cost Wall Street's leading brokers over $1bn was cleared by a New York judge yesterday, setting the scene for the largest civil settlement ever.

A group of investors had alleged they were cheated by the brokers in trades of stocks listed on Nasdaq exchange. The brokers were alleged to be fixing their prices and discriminating against smaller investors. A deal was arranged last year between the investors in the class action suit and the firms - which include Goldman Sachs, Merrill Lynch and Salomon Smith Barney - to pay the investors $1.03bn. It was approved yesterday by US District Judge Robert Sweet.

The government has already acted to discipline the firms, and most have agreed to improve compliance.