Ex-NYSE Seat Holder Sues Over Disclosure

A former New York Stock Exchange seat holder has sued the Big Board and Chief Executive John Thain, claiming that they breached their fiduciary duty by not disclosing plans to buy Archipelago Holdings Inc. to her before she sold her seat in March 2005.

Plaintiff Janet Hyman claims that she suffered damages of as much as $2.5 million as a result of her decision to sell her NYSE seat for $1.5 million. The NYSE announced its deal to buy Archipelago in April, and seat prices rocketed to a record $4 million.

Hyman claims in the suit, dated March 2 and filed in New York Supreme Court, that the defendants had a “fiduciary duty” to disclose to her the deal, saying that in a meeting of members Feb. 3, 2005, they “revealed incomplete information.”

The complaint argues that had Hyman been aware of the “full scope” of the discussions about the deal at the end of February 2005, “she would not have sold her seat on March 1, 2005.”

An NYSE spokesman declined to comment on the suit filed by Hyman.

It is the second such complaint filed against the exchange. In July, former seat holder Allison L. Wey sued the exchange and Thain, alleging that he gave misleading information about the NYSE’s plans to become a public company, which she claimed led her to sell her seat for substantially less than its true value.

The Big Board is scheduled to complete its deal to buy Archipelago today, a transaction that will turn it into a for-profit, publicly traded company. Shares of NYSE Group Inc. are scheduled to start trading Wednesday under the symbol NYX.

Shares of Archipelago fell $1.35 to $67.12.