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A Chicago jury on Tuesday ruled that former New York Stock Exchange President Gerald D. Putnam Jr. defrauded a former business partner in an electronic stock exchange venture.

Lewis Borsellino, Putnam's former partner, was awarded $11 million in damages following a nine-year legal battle over the value of Borsellino's stake in the electronic trading company that became Archipelago Holdings.

"I finally feel vindicated," Borsellino said Tuesday. "The former president of the New York Stock Exchange and Archipelago committed a fraud and cheated me out of the company."

Edward Ruff, legal counsel for Putnam and co-defendants Stuart and MarrGwen Townsend, wasn't immediately available for comment.

Borsellino alleged in a Chicago court that the defendants worked to cut him out of his rightful stake in Chicago Trading & Arbitrage, a company that Putnam later built into Archipelago along with the Townsends.

The Archipelago platform was among a wave of electronic stock-trading venues that challenged incumbent exchanges like the New York Stock Exchange and Nasdaq OMX Group Inc. (NDAQ) in the early part of the decade.

As cash equities trading increasingly migrated to electronic screens, the NYSE in 2006 merged with Archipelago to form NYSE Group Inc., predecessor to the current NYSE Euronext (NYX).

Putnam departed the NYSE in 2007. Representatives of NYSE Euronext said that the company isn't covering any of the legal costs involved in the case.

Borsellino, who sold his share in the original firm in 1998, charged that the $250,000 he got vastly undervalued the company's true worth, as Putnam and the Townsends were already negotiating with potential investors in the business.

In legal arguments, Putnam and his co-defendants said that the Chicago Trading & Arbitrage firm in which Borsellino was a stakeholder was entirely separate from Archipelago, and that they couldn't predict deals that were still to come.

Though Borsellino welcomed the victory, he said that he and his attorneys are mulling an appeal or separate legal action that could boost the damages. He had originally sought $100 million.

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com

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