The banks hope it will be back to business as usual

Although the brokerages did not admit any guilt, they agreed to cut ties between their share research and investment banking activities.

Two of the internet boom's star analysts, SSB telecom guru Jack Grubman and Merrill Lynch internet expert Henry Blodget, were banned from the securities business for life.

Although both men did not admit or deny wrongdoing, Mr Grubman was fined $15m while Mr Blodget had to pay a $4m fine.

The settlement not only cost 10 brokerages $1.4bn in fines, but two of them - Citigroup unit Salomon Smith Barney (SSB) and Credit Suisse First Boston - look likely to face fraud charges as well.

The other investment houses will probably face lesser charges.

Milestone

Securities and Exchange Commission Chairman William Donaldson told a press conference: "These cases are an important milestone in our ongoing effort both to address serious abuses that have taken place in our markets and to restore investor confidence and public trust by making sure these abuses don't happen again in the future."

BREAK-DOWN OF THE SETTLEMENT Salomon: $400m Merrill Lynch: $200m Credit Suisse Group's CSFB: $200m Morgan Stanley: $125m Goldman Sachs: $110m Bear Stearns: $80m JP Morgan Chase: $80m Lehman Brothers: $80m UBS Warburg: $80m US Bancorp's Piper Jaffray: $32.5m

The New York Attorney General Elit Spitzer said in a statement that the settlement was "the largest overall monetary payment in Wall Street history."

He also announced he would be taking further action against individuals linked to analysts' conflict of interest.

The fines relate to the alleged practice of using stock research the firms claimed was independent as a way of boosting their investment banking business.

The massive volumes of emails seized during the investigation, in which Mr Blodget and his peers were said to have privately denigrated stocks they officially tagged a "strong buy", may well be made public.

Biased research

The settlement follows at least a year of negotiation triggered by an array of investigations into the behaviour of investment banks during the 1990s.

Aside from the SEC, state regulators and New York Attorney General Eliot Spitzer have all accused the banks of biasing their research to please the big corporations which supplied them with lucrative investment banking business.

During the 1990s, the hottest ticket was the massive mergers and acquisitions business.

Regulators alleged that the banks' supposedly "independent" analysts routinely praised to the skies stocks they privately derided as worthless so as to please the potential M&A clients whose business they were chasing.