Biz media lose court ruling

Suzanne Barlyn of Dow Jones Newswires reports that business media such as Barron’s and Bloomberg have lost in a judge’s ruling as to whether documents could be unsealed that could shed light on charges that Mary Schapiro, now chairman of the Securities and Exchange Commission, misled brokers about terms of the Financial Industry Regulatory Authority’s creation three years ago.

Barlyn reports, “U.S. District Judge Jed Rakoff of New York ruled late Monday that correspondence between the former National Association of Securities Dealers, or NASD, and the Internal Revenue Service would remain under a protective order. Lawyers from Dow Jones & Co., acting on behalf of Barron’s; Bloomberg L.P.; and The New York Times sought the information in connection with a 2007 class-action lawsuit led by Standard Investment Chartered, a California-based brokerage.

“A key issue in the case is the adequacy of a $35,000 payout NASD made to its individual members when it merged with the regulatory arm of the New York Stock Exchange to form the Financial Industry Regulatory Authority, or Finra. In proxy material in December 2006, the NASD claimed that the IRS had precluded it from paying members more than $35,000 each. The lawsuit challenges that claim and says the NASD had plenty of money for a bigger payout.

“The motions by Dow Jones & Co. and other news organizations sought to review the IRS correspondence that purportedly established the $35,000 payout figure.”

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