Delaware Court Says Cantor Fitzgerald Likely to Win On Claims Against Iris Cantor, Rod Fisher, Market Data Corporation, CFI and Chicago Board Brokerage.

NEW YORK--(BUSINESS WIRE)--July 13--The Delaware Court of Chancery yesterday said that Cantor Fitzgerald LP (CFLP) is likely to succeed in its claims of breach of contract and breach of duty of loyalty against Iris Cantor, Rod Fisher and CFI, and in its claims of tortious interference, aiding and abetting and unjust enrichment against Market Data Corporation (MDC) and Chicago Board Brokerage (CBB), with respect to CBB's proposed US Treasury business.

In his ruling, Vice Chancellor Myron Steele, of the Delaware Court of Chancery, said "(Cantor Fitzgerald L.P.'s) 1996 Agreement clearly and unambiguously prohibits CFLP's limited partners from engaging in a Competitive Activity of a Competing Business."

CFLP brought suit against Iris Cantor, Rod Fisher and Iris Cantor's company, CFI, contending that they had violated provisions of the CFLP partnership agreement by providing MDC's MarketPower technology to the CBB's proposed electronic US Treasury venture. At the same time, CFLP brought suit against CBB and MDC for tortious interference and aiding and abetting the breaches of contract.

The Court also stated "If (CFLP) succeeds on the merits of its breach of fiduciary duty and contract interpretation claims (and (the court) has already explained that (CFLP) is reasonably likely to do so), it is equally likely that it will also be able to prove that neither MDC nor CBB can retain any benefit resulting from the success of MarketPower 'justifiably' or in accordance with the 'the fundamental principles of justice or equity and good conscience' because they knew that (Iris) Cantor, Fisher and CFI were prohibited from producing and marketing a product that would compete with (CFLP)."

Delaware Court did not grant Cantor Fitzgerald preliminary injunctive relief because the Court said the CBB "may be no more than a paper Tiger." The Court also noted that "Cantor Fitzgerald has significant 'potent trading advantages' including enhanced speed of transaction and confirmation, broad liquidity and pricing opportunities and a worldwide presence and reputation for being the place to do business, especially for benchmark issues and high volume trades."

In commenting on the Court's decision, Rodman Ward, Counsel for Cantor Fitzgerald, said "CBB's decision to go ahead, in the face of these warnings, may well expose CBB, MDC, The Chicago Board of Trade and Prebon Yamane (CBB's parents), the Clearing Corporation for Options and Securities Clearing (CCOS), The Board of Trade Clearing Corporation (CCOS' parent) and those who act with them, to a substantial risk of forfeiture and liability if the CBB is determined (as is expected), later in the year, to be illegal competition."

CFLP's other claims against MDC, CBB, CFI, Iris Cantor and Rod Fisher, including misuse of confidential information, were not the subject of the Court's ruling and will be prosecuted later this year.

Cantor Fitzgerald provides a broad spectrum of institutional brokerage and execution services to the global financial markets. It operates the world's largest electronic marketplace for G-10 sovereign debt, emerging markets, and Eurobonds and is also one of the largest "third-market" equity operations in the U.S. stock market. Cantor Fitzgerald has recently announced a joint venture with the Board of Trade of New York City (NYBT) to form an electronic exchange for US treasury futures trading. Headquartered in New York City, Cantor Fitzgerald currently employs more than 2,300 people in offices throughout the U.S., Canada, Europe, and Asia, serving the world's largest banks and security houses.

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