By Adam Geller
The Associated Press

NEW YORK - In a deal designed to restore investors' trust in Wall Street, the nation's biggest brokerage firms will pay $1.44 billion to resolve charges that they gave biased stock ratings, and pledged Friday to restructure the way they do business.

But it is unclear how much the settlement - one of the largest ever won by regulators - will do to compensate investors for losses, punish individual executives and analysts, and bring closure to a year of market scandals.

"Every investor knows that the market involves risk," New York Attorney General Eliot Spitzer told a news conference at the New York Stock Exchange. "Nobody expects a guaranteed profit. But what every investor expects and deserves is honest investment advice - advice and analysis that is untainted by conflicts of interest."

The firms allegedly misled investors by inflating stock ratings to help their firms win investment banking business.

The case drew widespread attention when authorities uncovered e-mails in which analysts privately derided stocks they were touting to the public and helped lead to the current crisis of confidence on Wall Street.

The settlement negotiated by Mr. Spitzer's office, the Securities and Exchange Commission and other regulators calls for 10 firms, including Citigroup, Goldman Sachs and Credit Suisse First Boston, to pay millions in fines, sever the links between research and investment banking, and fund independent stock research for investors that would complement their own analysts' work.

In agreeing to the fines, the firms would neither admit nor deny charges that they had misled investors.

Citigroup's Salomon Smith Barney brokerage unit will pay the heaviest fine: $300 million. But Citigroup CEO Sanford Weill won a guarantee he would not be prosecuted.

Credit Suisse will pay $150 million. Goldman Sachs, J.P. Morgan Chase, Bear Stearns, Morgan Stanley, Lehman Brothers, Deutsche Bank and UBS Warburg will each pay $50 million, according to a joint statement by regulators.

In May, Merrill Lynch, the nation's largest brokerage firm, agreed to a settlement that included a $100 million fine and the separation of its analysts from investment banking.

In addition to the $900 million in fines, the firms also will pay $450 million over five years for independent research and $85 million for a nationwide investor education program.

Richard Grasso, the chairman of the NYSE, said the settlement would help bring a close "to one of the darkest chapters in the history of modern finance."

But experts on the industry were divided in their assessments.

"I don't think it's going to restore trust," said Paul Lapides, director of the Corporate Governance Center at Kennesaw State University in suburban Atlanta.

"The settlement is like telling a bank robber if he gives the money back, he doesn't have to do jail time."

Industry restructuring will help going forward, but without stiff individual punishments there will be limited incentives for the brokerages to change their behavior, he said.

Sam Hayes, professor of finance at the Harvard University Business School, said, "It's an important day for investors, and I think from this point forward they ought to be able to follow the recommendations of the professionals on Wall Street with a lot more confidence."

Spokesman for many of the firms did not immediately respond to requests for comment. But some portrayed the settlement as a move forward for the industry.

"We share with our regulators the goal of restoring investor confidence," Citigroup said in a written release. "We have faced the difficult issues of the past several months head-on, and we have implemented new practices and standards that are leading the industry." The settlement excludes two smaller firms, US Bancorp Piper Jaffray and Thomas Weisel Associates, that had raised objections to the settlement this week. Negotiations are continuing and those firms are expected to pay $20 million each, said Spitzer spokesman Darren Dopp.

Mr. Spitzer said the settlement includes an agreement not to prosecute Citigroup chairman Sanford Weill and that regulators are nearing a settlement with the company's star analyst Jack Grubman that would include a $15 million fine and a lifetime ban from the industry.