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NYSE Seat Owner Files Lawsuit To Prevent Merger
New York Stock Exchange seat owner, William Higgins filed a lawsuit to prevent its merger with Archipelago Holdings.
Higgins claims that the terms of the merger are unfavorable to the NYSE's seat holders.
"The executives charged with overseeing the exchange have abandoned their duty to its membership in striking this lopsided deal with Archipelago Holdings," said Higgins. "We have spoken with many other seat holders who are as dismayed as we are by the inequity of this merger and we expect a groundswell of support for our action."
"We are not opposed to the merger in principle," he said. "It makes good business sense for the NYSE to seek a technology-based trading partner that can move the exchange forward into new platforms and advance new efficiencies."
If the merger is successful, an entity called NYSE Inc. would be created, worth about $4 billion. According to InformationWeek, "Current seat owners of the nonprofit NYSE would receive shares in the newly formed company. Under the terms of the merger, 70% of the equity would go to current NYSE members and 30% to Archipelago shareholders."
The NYSE doesn't seem to be too worried about Higgins' lawsuit.
"We have reviewed Mr. Higgins' complaint and find that it is completely without merit. We are proceeding with the merger as proposed," said a spokesman for the NYSE.
The suit was filed with the New York State Supreme Court.
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Chris Crum
