William Higgins - a longtime owner of a seat on the exchange and president of the Association of Nyse Equity Members - is the lead plaintiff in a proposed class-action lawsuit which was filed at New York State Supreme Court.

Nyse said in April that it was merging with with electronic trading network Archipelago. Under the terms of the deal Nyse members would receive a 70% stake in the merged entity and a $400 million cash payment, while shareholders of Chicago-based Archipelago will get the remaining 30%. Higgins argues that the merger grossly undervalues the Nyse.

Higgins claims he does not want to block the merger, but he does object to the terms of the deal. He accuses Nyse directors of a breach of fiduciary duty for failure to act in the best interests of members. The suit also accuses Goldman Sachs of a conflict of interest in acting as financial advisor to both parties. The investment bank holds 21 seats on the Nyse and also owns 15% of Archipelago.

Says Higgins: "We take particular umbrage at the way Goldman Sachs has manipulated the deal to its own advantage as a substantial Archipelago stakeholder that will own five per cent of the new company."

The lawsuit also states that the merger terms include unfair "lock-up" provisions for Nyse members – the deal would prevent seat holders from selling their interests in the exchange for up to five years, but would not impose the same restrictions on Archipelago shareholders.

"We have spoken with many other seat holders who are as dismayed as we are by the inequity of this merger and we expect a groundswell of support for our action," says Higgins.