Several class actions have been filed against electronic trading technology infrastructure company NYFIX, Inc., (Nasdaq:NYFXE) and certain of its officers and directors by stockholders who purchased the company's common stock between March 30, 2000, and March 30, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

The action names as defendants NYFIX, Inc., Peter Kilbinger Hansen, Richard A. Castillo, Mark R. Hahn, George O. Deehan, William J. Lynch and Carl E. Warden. During the applicable period, the defendants allegedly perpetrated a scheme to artificially inflate NYFIX's stock price by issuing a series of materially false and misleading financial statements and press releases which, among other things, overstated the value of NYFIX Millennium, LLC, a private company in which the NYFIX held a substantial ownership interest and which represented a substantial portion of its assets.

NYFIX’s Form 10-K's filed with the SEC for 1999, 2000, 2001, and 2002, and the press releases announcing the company’s financial and business performance for fiscal years 1999 through 2003 were false and misleading because the company allegedly: (1) improperly accounted for its 1999 original investment in, and 2002 acquisition of an additional interest of Millennium; (2) failed to properly allocate losses incurred by Millennium to NYFIX; (3) overstated the value of Millennium on the company's balance sheet; and (4) failed to properly write down goodwill from the 2002 acquisition of Millennium. NYFIX also allegedly failed to properly record $20.1 million in accumulated losses for the years ended December 31, 1999, 2000, and 2001, which would have painted a much different financial picture than was disclosed. The defendants perpetrated this scheme in order to enable the company to raise over $60 million in a public common stock offering and to use its artificially inflated stock along with the cash raised in the offering to purchase other companies.

On March 30, 2004, NYFIX issued a press release which stated, “Based on its discussions with the SEC staff, the company will restate its audited results for the years ended December 31, 1999, through 2002 to change the manner in which it accounted for the 1999 original investment in, and 2002 acquisition of an additional interest of, NYFIX Millennium.'' The market reacted negatively to this news. On the first day of trading after the announcement, NYFIX stock traded on very heavy volume and closed down over 7% at $5.16 per share.

If you purchased securities issued by NYFIX during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by July 13, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.