BILL HIGGINS, a New York Stock Exchange seat holder, last night sued the Big Board and Goldman Sachs in a bold attempt to derail the exchange’s $4 billion merger with Archipelago, the electronic share-trading firm.

The lawsuit is the latest stone to be thrown in the David and Goliath battle between Mr Higgins, 69, and the biggest and most powerful names on Wall Street.

Mr Higgins claims that John Thain, the NYSE chief executive and former Goldman Sachs finance director, was in breach of his fiduciary duty when he tied up the merger with Archipelago without consulting NYSE members.

The suit also claims that Goldman Sachs, financial adviser to the deal, “aided and abetted” the breach of fiduciary duty.

The investment bank owns about 15 per cent of Archipelago and was instrumental in setting up the firm. Goldman also represents both the NYSE and Archipelago in the deal.

Mr Higgins was the first to object to the terms of the NYSE-Archipelago merger, but since then others such as John Mack, the former chief executive of Credit Suisse First Boston, and Kenneth Langone, a former NYSE director and billionaire, have voiced objections to the deal.

Mr Higgins made it clear last night that he was acting alone when he filed the lawsuit in New York State Court yesterday morning. Goldman Sachs and the exchange are named as defendants in the case.

Mr Higgins, who is chairman of an association representing as many as 500 NYSE seat holders, believes Mr Thain grossly undervalued the exchange when he agreed to give 30 per cent of the company to shareholders of Archipelago under terms of the merger.

Mr Thain also agreed to pay seat holders, the actual owners of the exchange, about $400 million for their 1,366 seats.

But Mr Higgins has explained that the seats are worth far more than $400 million as the exchange has at least $1 billion of cash locked in its members’ equity fund.

Mr Higgins does not want to block the deal; he just wants the opportunity to negotiate better terms. His lawyer is expected to file an injunction against the deal once a merger date is announced.

The New York Stock Exchange said last night that the it had reviewed the lawsuit and found it to be “completely without merit”. “We are proceeding with the merger as proposed,” a spokesman said.

Companies in America’s share-trading arena are consolidating rapidly. Soon after the NYSE announced its tie up with Archipelago, Nasdaq revealed that it had bought Instinet, another electronic trader, for almost $1 billion.

Meanwhile shares of Ameritrade, America’s fourth-largest independent discount broker, surged as much as 24 per cent last night as E*Trade Financial, a rival, offered to buy the company for more than $5.5 billion.

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