A class action has been filed on behalf of all persons or entities who purchased or sold stocks of companies listed on the American or New York stock exchanges that were auctioned by the defendant specialists LaBranche & Company, Inc.; Bear Wagner Specialists LLC; Spear, Leeds & Kellogg Specialists LLC; Van der Moolen Specialists USA, LLC; and Fleet Specialist, Inc. during the period between October 17, 1998, and October 15, 2003. The action claims that the defendants violated federal securities laws by engaging in an unlawful and deceitful course of business designed to financially advantage themselves to the detriment of class members. The stockholders seek to recover compensatory damages for the loss of value of their stock.

Allegedly, the defendants violated the federal securities laws by engaging in a scheme that operated as a fraud and deceit on class members by stepping in the way of public sellers and buyers of stock. The action alleges that the defendants, in contravention of "negative obligation" rules, stepped "in front" of trades and failed to disclose that orders were not being filled at the best prices, but were being manipulated for the defendants' benefit.

On October 16, 2003, the Reuters news agency reported that: "The New York Stock Exchange said on Thursday it will seek fines totaling about $150 million against five of its floor-trading member firms for improper trading that could have cost clients millions of dollars. The exchange accused the five so-called specialist firms, which manage buying and selling of shares on the exchange floor, of enacting their own trades before executing customer orders and stepping between customers whose trades should have been matched. The exchange did not name them, but the firms and others close to the probe have said the five biggest specialist firms were under investigation. The firms are LaBranche & Co. Inc.; Vander Moolen Holding NV; Goldman Sachs Group Inc.'s Spear, Leeds & Kellogg; FleetBoston Financial Corp.'s Fleet Specialist; and Bear Wagner Specialists LLC, partly owned by Bear Stearns Cos. Inc."