Disputed Nasdaq Study Wins Award

A highly controversial academic study that suggested collusion among major dealers on the Nasdaq Stock Market has won an award from a top academic magazine.

The paper by professors William G. Christie of Vanderbilt University and Paul Schultz of Ohio State University won first place in an annual competition sponsored by the Journal of Finance, which is published by the American Finance Association.

The award, which carries a $5,000 prize, comes after the two professors and their study faced heavy criticism from Nasdaq and independent consultants hired by the market and major Wall Street firms.

The study led to a class-action lawsuit against about 30 of Nasdaq’s most powerful dealers and an extensive antitrust investigation by the Department of Justice. The Securities and Exchange Commission also is investigating.

Nobel Prize winning economist Merton Miller of the University of Chicago rebuked Christie and Shultz. Nasdaq hired Miller to rebut the study.

“It really does represent, in a sense, a vindication of the article,” Christie said in an interview. “The NASD and the consultants working for market makers tried to discredit the paper. To receive the prize shows the profession doesn’t share that view.”