Wall Street's Loss Won't Be Your Gain

Spitzer and the other state attorneys general who participated in the negotiations, meanwhile, have other plans for their stake. The $450 million designated for the states will be evenly split and most likely go into each state's general treasury account. In other words, restitution for the Internet bubble might very well be used to fill potholes on the New York State Thruway.

The remaining $535 million will go toward funding an investor education program -- a cheaper and presumably less rigorous program than the one taught by Wall Street itself over the last decade. The money also will be used to fund so-called independent stock research.

That's all well and good, but it doesn't prevent securities lawyers from arguing that regulators shortchanged investors by not holding out for more bucks.

"I would have liked to see a multibillion dollar settlement," said Jacob Zamansky, an attorney who filed one of the first successful arbitration cases against a Wall Street analyst. "What the firms are facing now is a war of attrition with their customers. We have been given the ammunition, but the problem is we have to prove it case by case."

Regulators haven't said yet which firms are qualified to provide investors with independent research reports. But from a monetary standpoint, it's those firms -- not investors -- that are the biggest winners in the Wall Street settlement.

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