Case Conclusion Date: February 8, 2008
Practice Area: Securities / Investment Fraud
Outcome: $13 million settlement
Description: Securities fraud class action alleging that NYSE specialist firm failed to disclose that it had engaged in regular and systematic violations of NYSE regulations that require specialists to refrain from trading for their own proprietary accounts while in possession of executable buy and sell orders from customers. These abusive trading practices are alleged to have included “inter-positioning” and “trading ahead” of customer orders. As a consequence of these practices, customer orders were disadvantaged by being executed at a price that was inferior to the price received by the specialist’s account. Successfully argued motion to lift PSLRA stay of discovery (see LaBranche, 333 F.Supp.2d at 183 (finding that the PSLRA policy of not burdening defendants with unnecessary discovery was not frustrated because the documents had already been found, reviewed and organized). Defeated motion to dismiss (See LaBranche, 405 F. Supp. 2d at 333).