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Case Status:    DISMISSED    
On or around 07/18/2007 (Date of order of final judgment)

Filing Date: December 03, 2004

On August 17, 2007, the Plaintiff filed a Notice of Appeal from the July 17, 2007 Opinion and Order granting Defendant Ameritrade's motion to dismiss the Third Amended Complaint with prejudice. The Appeal is currently pending in the U.S. Court of Appeals for the Second Circuit.

According to an article dated September 4, 2007, having tried and failed on two previous occasions to state a claim, in her third amended complaint, Plaintiff revised her breach of contract claim to allege that Ameritrade failed to route her orders to multiple market centers and failed to execute her orders at the quoted price, the "best" price, or with the best execution. The Court concludes that these new allegations still fail to state a claim. … Having had three bites of the apple, the Court finds that Plaintiff has been given ample prior opportunity to allege a claim but has been unable to do so. The motion to dismiss is granted with prejudice and Plaintiff's request for leave to replead is denied.

On January 31, 2007, a Third Amended Complaint was filed.

According to a journal article dated October 23, 2006, plaintiff's class action claimed damages from excessive delays and frustrations in executing orders to buy options on a stock exchange. Sole remaining defendant Ameritrade Inc. sought the complaint's dismissal as pre-empted by the Securities Litigation Uniform Standards Act (SLUSA) and for failure to state a claim. The court ruled that plaintiff's claim--that in exchange for her payment of transaction fees Ameritrade promised to execute her orders 'instantaneously' and failed to do so--was not pre-empted by the SLUSA because it pleaded contractual breach rather than a federal securities claim for misrepresentation or omission of material fact. However, the court dismissed her complaint for failure to state a claim observing that neither Ameritrade's Form 10-K for fiscal year 2000, its 1999 Terms and Conditions, nor the Frequently Asked Questions page of its Web site supported her claim that it promised to execute her orders within seconds. Rather, Ameritrade's duty was to distribute orders to market makers 'in an effort to obtain' the 'goal' of their best execution.

On March 3, 2005, the Court entered the Order granting the motion to appoint Hadassah Gurfein as Lead Plaintiff and the law firm of Lovell Stewart Halebian LLP, as plaintiff's lead counsel. On April 8, 2005, an Amended Complaint was filed. On May 3, 2005, a notice of dismissal with prejudice of defendant Interactive Brokers Group LLC was filed. In May and June 2005, the remaining defendants filed motions to dismiss the Amended Complaint. On January 30, 2006, the Court entered the Opinion and Order 92661. According to the Order, the State law claims are dismissed without prejudice. Based on the foregoing, the amended complaint is dismissed with prejudice as against the American Stock Exchange. It is dismissed without prejudice as against the other defendants, with leave to plaintiff to replead within 45 days. On March 27, 2006, a Second Amended Class Action Complaint was filed and, on May 1, 2006, the defendants responded by filing motions to dismiss the Second Amended Complaint. On May 10, 2006, the Court entered the Stipulation and Order dismissing the claims against Amex. On October 17, 2006, the Court entered the Opinion and Order dismissing the complaint against defendant Ameritrade, Inc. because the second amended complaint failed to state a claim on which relief could be granted.

The original Complaint alleges that defendants, in clear violation of and contrary to the Firm Quote Rule, materially misrepresented both (i) real time electronically displayed "bid" Equals and "ask" Equals quotes on listed equity options and (ii) that customer orders would be executed instantaneously when plaintiff (and other "Direct Access" Equals customers) accepted the bid or offer that was electronically displayed by the particular options specialist. Instead, defendants knowingly and intentionally, systematically refused to execute stock option transactions when Plaintiff, and others, submitted a limit order that specifically accepted the displayed quote or was specifically within the electronically displayed bid and ask -- which, under the appropriate circumstances, should have been executed instantaneously. Plaintiff claims that the wrongful conduct described above violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 and gives rise to state law claims such as breach of contract.

Note: This lawsuit was filed on behalf of investors who sought to execute direct access limit orders to buy or sell options listed at the American Stock Exchange by certain specialist firms and who were wrongfully refused executions and suffered damages between April 2, 2001 and December 3, 2004 inclusive.


Sector: Financial
Industry: Investment Services
Headquarters: United States


Ticker Symbol: OPTIONS
Company Market: American SE
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 04-CV-9526
JUDGE: Hon. Louis L. Stanton
DATE FILED: 12/03/2004
CLASS PERIOD END: 12/03/2004
  1. Lovell Stewart Halebian LLP (former New York)
  2. Squitieri & Fearon LLP (New York)
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 04-CV-9526
JUDGE: Hon. Louis L. Stanton
DATE FILED: 03/27/2006
CLASS PERIOD END: 03/27/2006
  1. Hanzman & Criden, P.A.
  2. Lovell Stewart Halebian LLP (former New York)
  3. Squitieri & Fearon LLP (New York)
  4. Zwerling Schachter & Zwerling LLP
No Document Title Filing Date
—Related District Court Filings Data is not available