The state of Iowa stands to gain $3.8 million following an agreement by 10 of Wall Street’s biggest investment companies to pay $1.4 billion to settle charges that they issued biased investment advice that helped corporate customers and hurt small investors.

The money is in addition to $500,000 the state already received in a similar settlement from Merrill Lynch & Co. Iowa’s portion of the settlement will go into the state’s general fund, according to Gary Marquett, a spokesman for the Iowa Insurance Division. Iowa officials expect to receive the money in the next several weeks, he said.

Last week’s settlement was the result of accusations by the Securities and Exchange Commission, regulators and state prosecutors that the Wall Street firms published research that persuaded investors to buy shares in troubled companies.

Individual investors will not receive any direct compensation as a result of the agreement, in which the investment companies neither admitted nor denied guilt. Investors are free, however, to seek money or other compensation themselves from the investment firms and they will have access to the records that were compiled by the officials who negotiated the settlement, Marquett said.

“If they want to, and they can prove their losses, they can bring their own case,” he said. “The point of this wasn’t to make the investor whole, but as a penalty for misconduct.”

Of the $1.4 billion total, $387.5 million will be set aside to repay investors who file claims with the government. In addition to that figure, the firms agreed to pay $487.5 million in penalties, $432.5 million for independent research and $80 million to better educate investors. The disbursements from the settlement to the states were determined by their populations, Marquett said.

Iowa Sen. Chuck Grassley, chairman of the Senate Committee on Finance, said last week he will introduce legislation that would prevent the Wall Street firms from deducting the cost of the settlement from their taxes or having the penalty paid by insurers. The firms had already promised as part of the settlement that they wouldn’t try to lessen the financial impact of the agreement by using those tactics.   Ten states took the lead in the investigation that resulted in the settlement, and each state focused on allegations of wrongdoing at a specific investment bank, Marquett said. Iowa was not a lead state, but it partnered with Washington state, which focused on Minneapolis-based U.S. Bancorp Piper Jaffray.