International Securities Exchange Holdings Inc. lost a second lawsuit over the Chicago Board Options Exchanges exclusive license to list options based on the Standard & Poors 500 and Dow Jones indexes.
U.S. District Judge Alvin K. Hellerstein in Manhattan on Dec. 19 threw out the case, citing ISEs loss of what he called an identical lawsuit in Illinois state courts, where the company was a defendant.
After bringing a federal case in New York and leaving it dormant for almost seven years, ISE and its co-defendant in the Illinois suit were now trying to re-litigate the same issues in his court, which they are barred from doing, Hellerstein said.
S&P Dow Jones Indices LLC, the winning defendant in the Dec. 19 ruling, owns benchmarks such as the S&P 500 Index and Dow Jones Industrial Average, which track the value of trillions of dollars in assets. The New York-based firm licenses rights to companies that want to create financial instruments linked to those indexes.
CBOE Holdings Inc., owner of the Chicago Board Options Exchange, has exclusive rights through 2018 to offer options on the S&P 500 and S&P 100.
That means Deutsche Boerse AGs International Securities Exchange, which runs one of the biggest U.S. options markets, is barred from expanding into a potentially lucrative business. S&P 500 options are CBOEs biggest product by revenue, according to its last annual report.
We are very disappointed by the judges decision and have no further comment at this time, Molly McGregor, an ISE spokeswoman, said in an e-mailed statement.
CBOE Holdings sued ISE in Illinois in 2006 to block it from providing a forum for trading the index options.
Judge William O. Maki in Chicago barred ISE from featuring the listings in July 2010, ruling that the CBOE had an exclusive license to offer options based on the S&P 500.
His decision was upheld by an Illinois appellate court. The U.S. Supreme Court denied New York-based ISEs bid for an appeal.
