Several fund managers, with the $200 billion California Public Employees’ Retirement System leading the charge, have filed a $1 billion class action against the New York Stock Exchange, charging that the NYSE cost investors hundreds of millions of dollars by allegedly encouraging specialists to trade ahead of their clients. According to The Independent, the Securities and Exchange Commission had censured the NYSE last year for failing to enforce compliance with federal securities laws, but nevertheless the commission dropped the NYSE as one of the defendants in a class action brought by CalPERS against seven firms. CalPERS is now appealing the court decision that released the NYSE from the case, in which the judge had ruled the exchange was immune from the suit for its regulatory decisions.
