National Discount Brokers (NDB) is one of the largest of the online brokers. NDB was ranked number one in Barron's annual survey of online brokerages in March 2000 and charges $14.75 per trade, a little less than the average for web brokers. Originally named Sherwood Group, the firm became NDB in December 1997 to reflect its commitment to Internet trading. "We believe that the Internet is the place to be," CEO Arthur Kontos said in a release at the time of the name change. "We've positioned the entire company to mobilize for e-commerce. It is now our core focus." NDB claims to be the first firm to allow trading on the Internet as well as the first firm to charge a flat commission fee on trades in 1995. The firm kept the Sherwood name: Sherwood Securities acts as a broker for institutional investors and as a market maker for NASDAQ stocks. NDB now services over 200,000 accounts with more than $9 billion.

Bump in the road

NDB suffered a black eye to its credibility in April 1997 when the firm settled a class action lawsuit brought by investors who claimed NASDAQ market makers were intentionally keeping a wide spread, the difference between what the firms paid for stock and the price they sold it to investors. NDB paid about $9 million but did not admit any wrongdoing.

Pomp and circumstance

NDB has signed several deals recently to further their Internet strategy and take it beyond trading. It's "NDB University" is powered by Money.com and educates users about finance and investing issues. Additionally, NDB paid Yahoo! an undisclosed amount to have a "trading button" on Yahoo's finance page. Visitors to Yahoo! finance can click the button, a direct link to NDB's home page. Several competitors have similar deals with Yahoo! NDB also signed an agreement with Houston-based Bank United Corp. to link to the bank's site in the hopes of attracting new customers. The firm established a business development unit in January 2000 to work on similar deals. Co-COOs Samir Shah and Gregg Sharenow head the BD unit.

Hacked off