New York Stock Exchange chairman Richard Grasso recently called 2002's conflict-of-interest scandals on Wall Street "one of the darkest chapters in the history of modern finance" (The New York Times, December 21).At the end of the year, 10 of the biggest brokerages (Citigroup's Salomon Smith Barney, Credit Suisse First Boston, Merrill Lynch, Morgan Stanley, Goldman Sachs, Bear Stearns, Deutsche Bank, JPMorgan Chase, Lehman Brothers, and UBS Warburg (which owns Paine Webber) agreed to a settlement of $1.4 billion in fines and the funding of independent research and investor education in hopes of putting to rest the various scandals that plagued the industry in 2002. Media coverage of the settlement addressed various topics, and though it was seldom the overriding theme, the prospect of lawsuits against these firms was the most visible topic. There was frequent speculation that when the regulators' evidence is made public in the coming weeks, lawyers will sift through it looking for "smoking gun" e-mails and other evidence that could prove in court that the brokers intentionally deceived investors. There was much more substantial reporting on the issue of whether the $1.4 billion penalty was harsh enough. The answer was often no. Reporting often acknowledged that while the sum is substantial, it is a mere fraction of what the 10 firms earned during the heyday of the market bubble. An editorial in The Wall Street Journal (December 21) pointed out that the sum Citigroup (which was fined the largest amount) would have to pay was "far less than the value that Citigroup stock rose Friday after the settlement was announced." Other stories conveyed mixed messages as to the overall impact of the settlement on investor confidence. While New York Attorney General Eliot Spitzer and other regulators presented the settlement as a significant step to restore confidence among individual investors, there was concern that the potential for abuse still exists, and that the return of investor confidence will take time. On CNN's Lou Dobbs Moneyline (December 20), 84% of viewers said the settlement "did not go far enough to restore confidence in the market's integrity." A number of media outlets placed more emphasis on the long-term structural reforms, rather than the short-term fines. These reports played up the changes that would end such practices as having investment-banking decisions influence research and the practice of "spinning" shares of hot IPOs to executives of current and/or prospective client firms. Finally, many reports noted the role bad publicity played in making Wall Street want to quickly resolve the matter. World News Tonight (December 20) reported, "All the revelations about conflicts of interest and dishonest advice have hurt their reputations and crushed their stock values." The Philadelphia Inquirer (December 22) said the real damage had been to the reputations of these brokerages: "The embarrassment suffered during the investigation has been far more important" than the fine, which the Inquirer characterized as "chicken feed" to these industry giants. While the settlement has been met cautiously, there is near unanimity that it's a good first step to reform and restore confidence. However, the settlement won't magically resolve investors' gripes about Wall Street. Indications are that investor confidence will still need a while to heal.