Lane Powell Assists in Dismissal for NYSE
Lane Powell recently defended the New York Stock Exchange (“NYSE”) in a case brought in federal district court by Sharebuilder Securities Corp., an online securities brokerage firm. Lane Powell served as local counsel, with Shareholder Chris Wells assisting NYSE Arca’s primary outside counsel, Milbank Tweed.
The plaintiff alleged damages resulting from payments it made to reimburse customers who claimed to have lost money on trades induced by a stock price that was allegedly reported on the NYSE Arca electronic exchange and was far below the usual trading range for that stock. Market orders were filled at prices in the usual price range, rather than at the implausible price, causing losses by a number of the plaintiff’s customers.
NYSE made clear that there was never a trade at the implausibly low price, just an anomalous or mistaken electronic order that was never filled. NYSE Arca filed a motion to dismiss on various grounds, including immunity accorded to regulatory organizations. Immediately after our co-counsel’s oral argument on July 13, Judge Thomas Zilly dismissed the complaint against NYSE Arca with prejudice on several grounds.