NationsBank Settlement and Microsoft Probe: Key Takeaways from $29 Million Settlement and Antitrust Investigations

Strategic Insights -

The U.S. District Judge Steven Merryday of Tampa has approved a $29 million settlement between NationsBank and its customers who were misled by the bank's brokerage unit when selling certain securities between August 1991 and June 1996. The settlement, which is expected to benefit about 500,000 customers, will be paid in addition to interest. NationsBank has admitted no wrongdoing as part of the settlement. Separately, the Justice Department has widened its antitrust investigation into Microsoft Corp.'s Internet software practices by sending civil subpoenas to MCI Communications Corp., America Online Inc., and other Internet service providers. The probe is focused on whether Microsoft is using its dominance in the Windows 95 operating system to unfairly gain market share for its Internet Explorer program.

Key Takeaways:

  • The $29 million settlement between NationsBank and its customers will benefit approximately 500,000 customers who lost money on investments with the bank between August 1991 and June 1996.
  • NationsBank admitted no wrongdoing as part of the settlement and will make payments to customers who show they lost money on investments.
  • The bank's release from all claims concerning the sale of securities is expected as a result of the settlement.
  • Microsoft is facing an antitrust investigation into its Internet software practices, with the Justice Department sending civil subpoenas to MCI Communications Corp., America Online Inc., and other Internet service providers.
  • The probe is focused on whether Microsoft is using its dominance in the Windows 95 operating system to unfairly gain market share for its Internet Explorer program.
  • Microsoft disagrees with the allegations, stating that more people use its browser because it works better.
  • The settlement and investigation are part of a broader trend of increased scrutiny of companies' business practices by regulatory agencies.

Statistics:

  • The $29 million settlement will be paid to roughly 500,000 NationsBank customers who lost money on investments.
  • The settlement is expected to benefit customers who lost money between August 1991 and June 1996.
  • The combined revenue of ValueRx and Express Scripts was over $2.7 billion in 1997.
  • Express Scripts is the third-largest independent pharmacy benefit management company in the country, providing service to about 12.3 million members in the United States and Canada.
  • Columbia/HCA Healthcare Corp. announced a $1.29 billion fourth-quarter loss due to a restructuring prompted by a federal investigation into its billing practices.

Sources:

  • NationsBank settlement approved by U.S. District Judge Steven Merryday of Tampa
  • Microsoft Corp.'s antitrust investigation by the Justice Department
  • ValueRx purchase by Express Scripts Inc.
  • Columbia/HCA Healthcare Corp.'s restructuring and $1.29 billion fourth-quarter loss
  • Times-Union article on insurance and finances advice