Former NYSE Euronext (NYX) President Gerald D. Putnam won reversal of an $11 million jury verdict in a lawsuit accusing him and two other people of cheating a former business partner of money from the development of the electronic stock exchange Archipelago Holdings LLC.
An Illinois appellate panel on Dec. 2 threw out the jury’s 2009 award, ruling that Lewis Borsellino, a former business partner and commodities trader, previously agreed to release the defendants from liability in exchange for $250,000.
In 1998, Borsellino’s company sued companies controlled by Putnam and Stuart and MarrGwen Townsend, with whom he had formed Chicago Trading & Arbitrage LLC. After the case settled, he sued again, claiming he had been misled about whether CTA money was used to create Archipelago. Archipelago merged in 2006 with the New York Stock Exchange creating NYSE Group Inc., now part of New York-based NYSE Euronext.
“Borsellino not only retained payment under the release, but also does not seek to rescind the release,” Illinois Appellate Court Judge Robert E. Gordon wrote. “The release barred Borsellino’s claim and we must reverse the judgment of the trial court.”
Borsellino’s attorney, Jon Loevy of Chicago, said in a voice-mail message that the appellate ruling was a mistake of law that he expects will be rectified by the Illinois Supreme Court.
“Nothing in the court’s opinion disturbed the jury’s finding that the defendants committed fraud,” Loevy said.
A lawyer for Putnam and the Townsends, Michael Pollard, said by e-mail that he was confident the intermediate-level appellate court ruling will withstand any further review.
“The court’s decision vindicates our clients after a decade of litigation and reverses the outcome of a trial that should have never taken place,” Pollard said.
The case is Borsellino v. Putnam, 2011 IL App 102242, Illinois Appellate Court, First District, Sixth Division (Chicago).
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