Jury Rules That Former NYSE President Putnam Cheated Partner
03 Novembre 2009 - 11:39PM
Dow Jones News
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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