The Chicago Board of Trade (CBOT) and representatives of the class who have filed suit against the Chicago Board Options Exchange (CBOE) in Delaware Chancery Court over CBOE’s attempt to terminate exercise right filed a temporary restraining order on July 20, seeking to prevent CBOE from terminating the exerciser rights while the issue is under consideration by the court.
On July 2, CBOE adopted a rule change granting temporary membership status to CBOT members exercising on the CBOE until the Securities and Exchange Commission takes action on the CBOE rule filing attempting to extinguish those rights. As of July 1, 2007, exercisers would be able to continue trading on CBOE and would be charged a fee. All other CBOT members with the necessary components to become exercisers would no longer be eligible.
The Delaware Court set a July 31 hearing date on the temporary restraining order motion.
CME Group issued a statement defending the exercise right. “CME Group is committed to vigorously defending the rights of CBOT B-1 members in the Delaware litigation against CBOE. The action brought in Delaware by CBOT and two individuals who represent the class of persons with exercise rights seeks to preserve all of the exercise rights granted to CBOT members by the CBOE Charter and the 1992 Agreement between CBOT and CBOE.” The release goes on to state, “CME Group and CBOT continue to believe that the merger of CBOT Holdings and CME Holdings Inc. did not impair the exercise rights of CBOT B-1 members under the terms of the 1992 Agreement and the CBOE Charter.”
The CBOT motion states that the Court should grant a restraining order because the actions of the CBOE drastically alters the status quo and immediately affects class members while the CBOE would not be harmed by awaiting a ruling by the court on the plaintiff’s claims.
