A jury in Dallas made the award to the former owners and employees of MMAR Group of Houston. MMAR went out of business shortly after publication of the 1993 article that sarcastically dubbed the firm "Make Money And Run".
If upheld, the damages could radically reduce the leeway allowed to financial journalists in the US in corporate reporting. It would also badly hurt the Dow Jones company, which is already facing unrest among members of its founding family because of a disappointing share price performance.
There remains a high probability, however, that the publisher will be able to have the damages significantly reduced and even thrown out of court. Historically, appeals against damage awards of this kind tend to be successful.
"No journalistic organisation, no matter how wealthy, can survive judgments like this," remarked Floyd Brown, a freedom-of-speech lawyer in New York. "The numbers are so stratospheric that, if they were to be sustained, they would lead to a sea change in the behaviour of all journalists".
The jury set $200m in punitive damages against the publisher and added another $22.7m in compensation. It also ordered the journalist, Laura Jereski, to pay $20,000. The damages amount to more than four times the previous record in a US libel case.
Dow Jones pledged to appeal instantly. "We were chronicling the difficulties of this company; we did not cause them," remarked the Journal's managing editor, Paul Steiger.
Jim George, the lawyer for Dow Jones, added: "Obviously we are disappointed. The punitive damages are completely unfounded. I don't believe they can be supported as a matter of law. There's no evidence the reporter or the Wall Street Journal had any doubts about the truth of the story".
The article implied that MMAR had been reckless in its mortgage-backed securities business and was under investigation by US regulators. It said that MMAR mispriced securities to disguise a loss of $50m in dealings for the Louisiana state pension fund. It also described MMAR owners spending $8,000 in one night entertaining Japanese brokers in a topless bar.
Texas is renowned for awarding extravagant libel damages. The jury may have been moved by the subsequent fate of MMAR which was forced to close with the loss of 94 jobs. The award also highlights the deep disdain in which journalists are held by the American public in general.
Recent months have seen two libel suits succeeding against the ABC television network, one resulting in $10m damages awarded to a Florida doctor, and another in $5.5m for a supermarket chain.
The previous libel damages record was in a case against AH Belo of Texas which was hit with $58m in damages. That case was later settled out of court, however, for an undisclosed amount.
The award has come at a delicate time for Dow Jones, which is already battling bad publicity over the dissatisfaction of its shareholders. Dow Jones has been unable to give momentum to its share price in part because of the disappointing performance of its troubled financial information service, Telerate.
Unconfirmed rumours surfaced last month that Reuters was considering investing in Dow Jones, perhaps with a view eventually to taking it over.