“Regulators plan to announce Friday an agreement with the largest U.S. securities firms that would overhaul Wall Street stock-research practices in a settlement that could cost Wall Street as much as $1.5 billion,” writes Charles Gasparino in today’s Wall Street Journal.

“The historic agreement, the final details of which were being hammered out Thursday night, would force brokerage companies to make structural changes in the way they handle research — preventing, for instance, analysts from attending investment-banking pitches with bankers. A news conference to announce the long-awaited settlement is expected to be held Friday at the New York Stock Exchange.”

“Among other changes in how Wall Street will operate, under the new pact: There would likely be a database set up, showing clearly to the public the brokerage analysts’ latest calls, and firms also would have to dole out independent research to small investors in addition to reports from their own analysts.”

“The agreement involved heavy give-and-take between the Street and regulators, and reaching a final pact was elusive. At times, it was ‘like hugging a bear made of jelly,’ a regulator said. One firm, Merrill Lynch & Co., Thursday was still quibbling over the details of what enforcement action would be taken. That said, the deal seemed all but completed Thursday night.”

“In recent days, Securities and Exchange Commission Enforcement Chief Stephen Cutler, NYSE Chairman Dick Grasso and New York Attorney General Eliot Spitzer put on a final push to jawbone enough Wall Street executives into accepting a deal.”

“Under terms of the deal, Citigroup Inc., owner of Salomon Smith Barney, will pay a $325 million fine; Credit Suisse Group’s Credit Suisse First Boston, $150 million; and Goldman Sachs Group Inc. and Morgan Stanley will pay $50 million each, people close to the negotiations said.”

“All told, Wall Street is slated to pay close to $1 billion in fines and an additional $500 million to finance the distribution of independent research to small investors. The settlement would be among the largest deals ever crafted with Wall Street to end an investigation; the largest is the $1 billion civil settlement in 1996 to resolve charges of price fixing by dealers on Nasdaq stocks.”