Believe it or not, the $1.4 billion Wall Street research settlement still isn't a done deal.

The New York federal judge who must approve the deal wants the

Securities and Exchange Commission

and the 10 securities firms that are settling with regulators to provide some more information before he signs off on the pact.

Most notably, U.S. District Judge William Pauley wants to know whether the investment banks intend to ask their insurers to pay a portion of their penalties, and whether the settlement's conflict-of-interest provision applies to work done by the investment banks in Europe and Asia. Both issues have become hot-button points of controversy in the weeks since the settlement was announced in April.

Some critics have suggested the settlement should have forbidden the firms from seeking reimbursement from their insurers. Others contend the deal may be flawed because it seems to allow for overseas contacts between investment bankers and research analysts, even though such contacts are now prohibited in the U.S.

Judge Pauley is giving the SEC and the firms until July 18 to submit written answers to his questions. This is the second time the judge has asked for more information about the settlement, in which


(C) - Get Report


Credit Suisse First Boston


Merrill Lynch


are paying the biggest fines.

The judge also wants the SEC to provide the names of the three people it is considering to oversee an investor restitution fund. About $400 million of the $1.4 billion settlement is dedicated to compensating investors harmed by Wall Street's tainted stock research.

The judge made the request for additional information in a July 3 order. He said the information is needed to help him determine the "fairness and reasonableness" of the deal.

The settlement doesn't become final until Judge Pauley approves it. He also can reject it, or force the parties to modify its terms. Most legal experts, however, expect the judge to approve the deal because it took so many months to negotiate.

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