NYFX » Topics » Litigation

This excerpt taken from the NYFX 10-K filed Mar 16, 2009.


In 2006, we were named as a nominal defendant in several shareholder derivative actions. These were consolidated into two actions, one pending in Connecticut Superior Court (the “Consolidated State Suit”) and one currently on appeal from the United States District Court for the District of Connecticut (the “Consolidated Federal Suit”). One or both of these actions also named as defendants a number of our former officers and directors, including a former Chairman and Chief Executive Officer, another former Chief Executive Officer and director, a former Chief Information Officer, two former Chief Financial Officers, our former General Counsel and the former Executive Vice President and President of NYFIX Millennium. These actions demand unspecified money damages, ask for an accounting and seek rescission of allegedly misdated options based on, among other things, alleged breaches of fiduciary duty, unjust enrichment and breach of contract. Defendants filed motions to dismiss both of these matters. In July 2008, the United States District Court for the District of Connecticut dismissed the Consolidated Federal Suit and entered judgment in favor of our company and the individual defendants. In August 2008, the plaintiffs in the Consolidated Federal Suit appealed the dismissal to the United States Second Circuit Court of Appeals. Our company and the individual defendants in the Consolidated Federal Suit cross-appealed one aspect of the District Court’s ruling related to the lack of findings that the plaintiffs complied with applicable law. In November 2008, the federal appeal was withdrawn to allow the parties to finalize a global agreement in principal to settle all claims in both the Consolidated State Suit and the Consolidated Federal Suit.

On February 25, 2009, the parties executed a global settlement agreement and filed a motion with respect to the Consolidated State Suit seeking court approval of such agreement. This agreement requires that we adopt certain corporate governance practices and provides for a payment of $1.3 million in legal fees to



plaintiffs’ counsel that will be paid directly to plaintiffs’ counsel by our insurance carrier. That motion remains pending. There can be no assurance that the court will approve the settlement. If the court approves the settlement, the court’s decision may be subject to appeal.

During the normal course of business, we become involved in various routine legal proceedings. We believe that we are not presently a party to any material litigation other than as described above, the outcome of which could reasonably be expected to have a material adverse effect on our consolidated financial statements.

This excerpt taken from the NYFX 10-K filed Mar 7, 2007.


There are lawsuits that have arisen subsequent to December 31, 2005 that involve the Company, and, in some cases, certain of the Company’s directors and officers, as defendants. See Note 10, for a discussion of these matters.



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Mar 16, 2009
Mar 7, 2007
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