A class action lawsuit filed in Pennsylvania alleges stock options for a large pharmaceutical company were manipulated illegally.
Stephen Rabin filed the lawsuit against "John Doe market makers" on Feb. 5, alleging the market makers illegally pre-arranged options trades for Pfizer stock on the Philadelphia Stock Exchange.
The lawsuit doesn't name any specific market maker, but alleges they “inflated the size of the options open interest pool for Pfizer stock by flooding the market with over a million additional option contracts one day before the ex-dividend date of (Pfizer) common stock.”
The result, the lawsuit alleges, is that the bulk of dividend payments would go to market makers rather than to the plaintiffs.
The lawsuit alleges the actions of market makers have damaged other investors by “hundreds of millions of dollars.”
The plaintiff seeks class status beginning on Feb. 6, 2010, to the present, an unspecified amount in damages and court costs.
The plaintiff is represented by Lawrence Deutsch, Robin Switzenbaum and Phyllis Parker of Berger & Montague, P.C., in Philadelphia, and Jeffrey Squire and Lawrence Eagel of Bragar Eagel & Squire, P.C., in New York City.
United States District Court for the Easter District of Pennsylvania case number 2:15-cv-00551.