Cantor Fitzgerald Wins Another Round in Delaware Trial; Judge Refuses to Dismiss Breach of Contract and Breach of Fiduciary Duty Case against Iris Cantor and Rod Fisher.

NEW YORK--(BUSINESS WIRE)--June 16, 1999--

Marking a major legal victory for Cantor Fitzgerald, L.P. (CFLP), Vice Chancellor Myron Steele of the Delaware Court of Chancery yesterday rejected a motion by the defendants to have their breach of contract and breach of fiduciary duty trial dismissed. As a result, defendants Iris Cantor, Market Data Corporation (of which Rod Fisher is Chairman and CEO), Rod Fisher and CFI (a company Iris Cantor controls), continue to face serious penalties stemming from their damaging actions taken against CFLP.

In the same ruling, Vice Chancellor Steele granted a motion made by CFLP to amend its complaint and seek additional relief against Market Data Corporation (MDC). Among the additional relief sought is a declaratory judgment stating that MDC cannot now or at any time in the future, aid and abet a breach of the non-compete provisions of the CFLP Partnership Agreement. In addition, Vice Chancellor Steele has permitted CFLP to amend its complaint against MDC to include a request for a declaratory judgment that MDC cannot aid and abet violations of the CFLP Partnership Agreement.

Responding to the decision, Rod Ward, Senior Partner with Skadden, Arps, Slate, Meagher & Flom LLP and counsel for Cantor Fitzgerald, L.P. said, "The core issue in this case has always been, and continues to be, protecting the integrity of the Cantor Fitzgerald Partnership Agreement. We are confident that the Court will determine that Iris Cantor and Rod Fisher deliberately breached the Partnership Agreement. Such a ruling will be a victory for Cantor Fitzgerald and its partners."

Vice Chancellor Steele disagreed with the defendants argument that the recent settlement between Cantor Fitzgerald, L.P., Chicago Board Brokerage (CBB), the Chicago Board of Trade (CBOT) and Prebon Yamane made CFLP's case against MDC moot. Steele wrote "the settlements did not moot the much larger issue of MDC's freedom to engage in Competitive Activities and activities that harm or reasonably would be expected to harm CFLP while CFI, Iris Cantor and Rod Fisher are CFLP Partners."

In October of 1997, CFLP warned MDC in writing that it was engaged in illegal competition. Despite this fact, MDC proceeded to develop and market the CBB system. In his opinion, Vice Chancellor Steele noted "in light of MDC's willingness to proceed with the CBB deal over CFLP's objection CFLP should not be forced to rely on MDC's representation by counsel to this Court that (i) MDC will not engage in any of the activities that the declaratory judgments CFLP requests would cover until the final resolution of the issues between CFLP and CFI, Iris Cantor and Rod Fisher."

The Delaware Trial results from a lawsuit filed by CFLP in April of 1998. The suit charges that three CFLP partners, Iris Cantor, CFI and Rod Fisher worked through MDC to develop and sell technology to Chicago Board Brokerage, a start-up firm which sought to compete with Cantor Fitzgerald, L.P. In April, CFLP, CBB, the CBOT and Prebon Yamane (CBB's parent companies) reached an agreement which prohibits CBB, CBOT, Prebon Yamane and their respective affiliates form using the computer software provided to CBB by Market Data Corporation. The agreement also prohibits those same parties from using the name "MarketPower". In May, CBOT and Prebon Yamane announced that CBB would cease all operations.

In yesterday's ruling, Vice Chancellor Steele wrote, "The reality of recent settlements between CFLP and CBB and between MDC and CBB.........do not belie the contention that an actual controversy between MDC and CFLP exists. I am not convinced that MDC will refrain from taking actions that could be covered by the declaratory judgment CFLP now seeks from this Court." Continuing, Steele stated, "I see no way in which the recent settlements have had any impact on the relief CFLP seeks against CFI, Iris Cantor and Rod Fisher. In order to reserve my broad discretion to fashion the appropriate remedy in this case, I deny CFI, Iris Cantor and Rod Fisher's mootness motion."

As the trial continues, the defendants must convince the Court that they should not face serious penalties for their damaging actions taken against CFLP. There is a broad range of penalties which may be imposed upon them including (i) forfeiture of millions of dollars in distributions from the Partnership for the period during which they were in breach of the agreement (ii) Iris Cantor, Rod Fisher and CFI being required to redeem or forfeit their partnership units and exit the partnership and (iii) Iris Cantor, Rod Fisher and CFI being enjoined from engaging in such conduct in the future and (iv) a declaratory judgment stating that MDC cannot aid and abet a breach of the non-compete provisions of the CFLP Partnership Agreement.