WASHINGTON - Donaldson, Lufkin & Jenrette Securities Corp. announced yesterday that it will pay $1 million to settle securities fraud charges brought by hundreds of stockholders who invested in the 1986 initial public offering of Matthews & Wright Group Inc. stock.

The stockholders filed suit against Donaldson in August 1987 after the price of Matthews & Wright stock plummeted from $13 a share to roughly $3 a share. The price drop followed press reports that Matthews & Wright had conducted billions of dollars of bogus bond closings using an unlicensed shell bank in the Northern Marianas.

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