Nasdaq Dealers Show Willingness To Collude

The Justice Department says Nasdaq Stock Market dealers exhibit “a willingness and ability to collude” and is supporting proposals to increase competition.

The Justice Department comments, in an 11-page letter to the Securities and Exchange Commission that was released Tuesday, come as the agency’s antitrust division continues a major investigation of the Nasdaq, the nation’s second-largest stock market.

One Nasdaq expert and a market critic, finance professor David Whitcomb of Rutgers University in New Jersey, said it was “highly significant” that the Justice Department would make statements about dealer collusion. But Catherine Ludden, a New York-based attorney involved in the brokerage firms’ defense, said, “I would hesitate to read too much into what the Justice Department says” in the SEC comment letter.