Certain key points of the settlement are as follows: The PHLX has denied that it has any liability to the plaintiffs; The settlement is subject to preliminary and final approval by the court (the United States District Court for the Southern District of New York); The Exchange will pay to the plaintiffs the sum of $2.8 million, which will be held in escrow pending final approval by the court and the satisfaction of certain other conditions; and All or a portion of the settlement payment will be refunded to the Exchange in the event that the settlement is not approved by the court or certain pending motions to dismiss are granted in their entirety.
The suit will continue with respect to the remaining defendants, but proceedings against the PHLX will, subject to court approval, be stayed. The Pacific Exchange had previously announced that they entered into a settlement agreement with the plaintiffs, which involves a settlement payment of $4.5 million.
"Although the PHLX denies the allegations set forth in the consolidated complaint in the lawsuits, the Board and I felt that it was important to the PHLX's ability to move forward with its strategic initiatives without ongoing expenses and the commitment that defending this major lawsuit would have entailed," Sandy Frucher said.
The PHLX is the nation's first securities exchange and is a market leader in the trading of 2600 equities, 825 equity options, 11 sectors index options and 100 currency pairs.
