Two years after D.H. Blair & Co. ceased operations, a New York grand jury indicted the retail brokerage firm and several of its executives and employees on racketeering charges, prosecutors said Thursday.

The executives, including Kenton Wood, the firm's chairman, and Alan Stahler and Kalman Renov, its vice chairmen, face up to 25 years in state prison if they are convicted on the felony charges.

The indictment also names 12 other D.H. Blair employees including Vito Capotorto, the firm's head trader, and Alfred Palagonia, the top-producing broker.

The 173-count indictment charges that the firm defrauded its own customers, other investors, other brokerage firms and securities regulators from 1989 through 1998. The charges include manipulating the prices of IPOs and engaging in illegal sales tactics, including dodging customers' orders to sell stocks.

Prosecutors noted that more than 50,000 customers invested with the firm and that it made "large profits," but they said the extent of customers' losses was unknown.

All defendants surrendered and pleaded not guilty Thursday afternoon.

"D.H. Blair & Co. and its executives are innocent of these charges, absolutely deny that they engaged in any criminal activity whatsoever and anticipate their ultimate vindication," said Andrew M. Lawler, a lawyer for the firm and its executives. "The indictment is erroneously based on novel theories of securities law which we believe cannot be the basis for criminal charges."

Each defendant was also charged with securities fraud and scheme to defraud in the first degree. Both charges are felonies punishable by up to four years in state prison, but convictions on the racketeering charges would control the sentencing, prosecutors said.

J. Morton Davis, who joined Blair in 1961 and bought a majority stake seven years later, was not named in the indictments. Davis gave the retail brokerage arm of the company to his family in 1992, retaining control of the investment banking division, D.H. Blair Investment Banking, which continues to operate today. Stahler and Renov are his sons-in-law. Davis did not return calls for comment.

The indictments also accused some Blair employees of falsifying business records, suppressing complaints and giving false testimony. Brokers at D.H. Blair obtained boxes of computer printouts owned by the firm Salomon Smith Barney and containing the names of more than 10,000 of its customers, said Daniel J. Castelman, chief of the investigation division for the Manhattan District Attorney. Brokers from D.H. Blair cold-called many of the people named on the list, he said.

Castelman said Salomon Smith Barney is not involved in the investigation "except as the victim of a theft."

Duncan King, a spokesman for Salomon Smith Barney, declined to comment.

It was unclear whether investors could expect any restitution beyond $2.4 million obtained byNASD Regulation in 1998.

Castelman said in a telephone interview that restitution could be included in a plea agreement, or a judge could order it as part of a conviction.

"It is the policy of this office to try to return criminal proceeds to the victim," he said.

"It's clear to us that they have substantial assets," he said, referring to the defendants. "Some were making more than $1 million a year."

Prosecutors said they built a case from leads obtained in an investigation of A.R. Baron, a penny-stock brokerage firm that filed for bankruptcy protection in 1996. Andrew Bressman, a top-producing broker at D.H. Blair, left the firm in 1992 to found Baron with a group of former Blair brokers. In 1997, he pleaded guilty to one count of enterprise corruption and one count of grand larceny, agreeing to cooperate with the district attorney. He has not yet been sentenced.

In 1997, the New York Stock Exchange censured Blair and fined it $250,000, alleging the firm did not take proper steps to prevent misconduct by its brokers. Later, the National Association of Securities Dealers censured the firm and fined it $4.3 million for allegedly overcharging retail investors. Concurrent with that action, Wood and Capotorto paid a combined $525,000 in fines, neither admitting nor denying wrongdoing. In 1998, Blair set up a $2.25 million restitution fund after settling state investigators' charges of abusive sales practices.