Court Reinstates Calpers' NYSE Suit

NEW YORK -- A federal appeals court has reinstated a lawsuit by the California Public Employees' Retirement System (CalPERS) against the New York Stock Exchange over the exchange's alleged role in the "specialist" stock-trading scandal, The Wall Street Journal reported Tuesday.

In an opinion Tuesday, the Second Circuit Court of Appeals said the district court erred in finding that lead plaintiffs CalPERS and a company called Empire Programs Inc. lacked standing to bring the lawsuit for purported misrepresentations concerning the Big Board's market integrity and internal operations, the paper reported.

The three-judge panel did agree with the lower court's ruling that claims concerning the NYSE's alleged regulatory failures were barred by the doctrine of absolute immunity, since the exchange is a self-regulatory organization, the paper reported.

"The district court concluded that lead plaintiffs lacked statutory standing to pursue their misrepresentation claims against the NYSE," U.S. Circuit Judge Sonia Sotomayer wrote in the 25-page opinion, the paper reported. "However, the district court's reasons for dismissing the lead plaintiffs' claims were flawed."

-- NYSSCPA.org News Staff

Posted on 9/17/07