Sparta Surgical Corp. v. National Ass'n of Securities Dealers, Inc.

In this appeal we consider what civil remedies are available against a national securities exchange for temporarily de-listing and suspending trading in a stock on the opening day of a public offering. We agree with the district court that defendants are entitled to regulatory immunity, and affirm dismissal of the action.

I

The National Association of Securities Dealers (“NASD”) is a non-profit, self-regulatory organization registered pursuant to the Maloney Act amendments to the Securities Exchange Act of 1934 (“Exchange Act”). 15 U.S.C. § 78a et seq.; see also National Assoc, of Sec. Dealers, Inc., 5 SEC 627 (1939). NASD is the only securities association registered with the Securities and Exchange Commission (“SEC”) under 15 U.S.C. § 78o-3, and is the primary regulatory body for the broker-dealer industry. It supervises the conduct of its members under the general aegis of the SEC. The Nasdaq Stock Market, Inc. (“NASDAQ”) is a wholly owned *1211 NASD subsidiary which processes quotations for most over-the-counter equity trading. NASDAQ is the only exchange which NASD both owns and regulates.

Sparta Surgical Corporation (“Sparta”) is a medical products manufacturer and…