A lawsuit filed Friday by Sea Carriers LLC seeks $4 billion in damages from the New York Stock Exchange's parent NYSE Euronext, as well as Goldman Sachs, Bank of America, Bear Stearns, LaBranche & Co. and Van Der Moolen -- which own "specialist" floor-trading businesses. Sea Carriers, according to the lawsuit, traded 4.5 billion shares of NYSE stocks though the SuperDOT system from 1998-2002. Sea Carriers alleges the defendants misrepresented the market for execution services and costs of execution of trades on the NYSE, manipulated trading, and fixed the costs of execution services at anti-competitive levels: "Empirical evidence demonstrates that those who traded through the SuperDOT system got consistently worse executions than those who traded through floor brokers... As a result of defendants' misconduct, the costs of purchasing and selling (securities) by public investors were artificially manipulated and distorted," the complaint said. In 2003, Sea Carriers tried unsuccessfully to join a Calpers (California Public Employees' Retirement System) lawsuit against the NYSE as a lead plaintiff; the lawsuit was ultimately dismissed by the court and is currently in appeal. None of the defendants commented on the merits of the lawsuit.
Sources: Dow Jones Newswire, Reuters, CNBC
Commentary: Treading Carefully In Exchange Stocks • Specialist Exodus Poses Problem for New ETFs -- WSJ • NYSE: Gains Are Far From Automatic -- Barron's
Stocks/ETFs to watch: NYSE Euronext (NYX), Goldman Sachs Group Inc. (GS), Bank of America Corp. (BAC), Bear Stearns Companies Inc. (BSC), LaBranche & Co. Inc. (LAB), Van Der Moolen Holding NV (VDM)
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