Another Suit Targets NYSE

A second former New York Stock Exchange member has sued the Big Board and its chief executive, John Thain, over claims that she was not told of the exchange's plans to go public when she sold her seat last March.

The suit comes a day before the merger of the exchange and Archipelago Holdings(AX Quote - Cramer on AX - Stock Picks), one of the largest electronic trading operators, is expected to close. Shares of the new company, the NYSE Group, are expected to begin trading on Wednesday under ticker symbol NYX.

Filed in New York State Supreme Court last Thursday, the suit asks for $2.5 million in damages and states the exchange violated its fiduciary duty by not disclosing full information about the impending sale.

Janet Hyman of Sarasota, Fla., sold her seat for $1.5 million on March 1, a month before the NYSE and Archipelago announced their $9 billion merger. The deal was expected to help the exchange compete against its rival, Nasdaq.

"They had a duty to make a disclosure to them," said Ethan Brecher, a lawyer at Liddle & Robinson in New York who is representing Hyman in the suit.

A spokesman for the exchange did not return calls for comment. The NYSE has one month to respond to the suit and can file a motion to dismiss the suit, Brecher said.

Other former holders have sued the exchange over the merger. Last April, Allison Wey sued the NYSE and its chief executive for allegedly hiding the exchange's plans to go public. Wey contends that she would not have sold her seat for $1.54 million last March if she had known about the merger.

Exchange seats have sold for as much as $4 million since April.