A federal judge declined to unseal a March 2007 IRS opinion letter that laid out guidelines for the payment the NASD made to member firms following the 2007 merger with the NYSE.
The letter gave a range of permissible payments the NASD could have given to its members, but the dollar amounts have been redacted by court order.
Judge Jed Rakoff of the U.S. District Court for the Southern District of New York said he wanted to release the full letter, but was bound by an earlier ruling from doing so.
Another U.S. District Court judge, the late Shirley Whol Kram, sealed the letter in 2007, saying that disclosure of the IRS payment range would harm the NASD's competitive advantage. An appeals court upheld that decision.
"If this court were writing on a clean slate, it might disagree with the conclusion" reached by Ms. Kram, Mr. Rakoff wrote.
He indicated that disclosure of the full letter would not affect anything but the NASD's merger with the NYSE, and that disclosure would favor the public interest
Case law, however, discourages modification of protective orders without significant reasons for doing so, the judge noted.
Dow Jones & Co. Inc., Bloomberg LP and the New York Times had sought release of the letter.
The IRS letter was produced as part of suit brought by two broker-dealers that claim NASD executives, including then-NASD chief Mary Schapiro, misled brokerage firms by insisting that $35,000 was the most that could be paid to member firms.
In a court hearing last December, Jonathan Cuneo, founding member of Cuneo Gilbert & LaDuca LLP, who represents the two plaintiff firms, told Mr. Rakoff that NASD members could have received an additional $35,000 to $76,000 each.
He cited the IRS letter.
Ms. Schapiro is now chairman of the Securities and Exchange Commission.
The NASD and NYSE Regulatory have been merged and renamed the
Financial Industry Regulatory Authority Inc.
William Anderson, one of the plaintiff's attorneys for Cuneo Gilbert & LaDuca, declined to comment about yesterday's ruling.
"The judge's ruling speaks for itself," Finra spokesman Herb Perone said.
Mr. Rakoff has said he plans to decide this month whether the suit against Finra can continue.
