Calpers, the biggest U.S. pension fund, on Tuesday filed a lawsuit against the New York Stock Exchange and its specialist trading firms, alleging widespread trading abuses by the firms that it said went unchecked by the NYSE for years.
``We are filing today a landmark lawsuit to recover losses and to right a serious wrong that exists at the New York Stock Exchange. That wrong involves the specialist trading system,'' said Sean Harrigan, president of the Calpers board of administration.
``The lawsuit alleges that the exchange looked the other way most of the time when these rules were violated. We intend to seek recovery of every single dollar lost,'' he said during a press briefing in Sacramento to announce the suit.
Ray Pellecchia, spokesman for the NYSE, declined to comment.
The lawsuit alleges specialists employed ``artifices to defraud'' and argues ``that NYSE orders were not being filled at the best available prices ... `` and ``financially advantaged'' the specialists.
The firms named in the suit include
LaBranche & Co. Inc. (LAB.N)
Van der Moolen (VDM.N) (VDMN.AS)
Spear Leeds & Kellogg, which is owned by Goldman Sachs Group (GS.N)
Fleet Specialist Inc., a division of FleetBoston Financial Corp. (FBF.N)