Lawsuit Accuses Chicago Exchange Of Playing Favorites

CHICAGO - Two members, including a Chicago-based broker-dealer, have sued the Chicago Stock Exchange and five of its officials, alleging a pattern of preferential treatment and financial negligence.

The plaintiffs claim the alleged activity has cut exchange volume and revenues.

Scattered Corp. and Laura Bryant filed a lawsuit recently seeking compensatory damages and a halt to alleged misconduct by exchange officials.

However, George Simon, an attorney representing the exchange, said the suit looks identical to a nine-month-old complaint from Scattered Corp. that an exchange committee previously investigated and found to be without merit.

Scattered Corp. alleges that since 1985, exchange officials have given some members preferential treatment - including lax rules enforcement, disproportionately large assignment of valuable stock specialist posts, and hiring of ghost exchange employees.

The suit also alleges certain exchange officials took gratuities, such as use of resort condominiums and paid vacations, while other officials looked the other way.