Wolkoff, Furse trade blows on FT Exchange
The Financial Times has been the platform of two interesting exchanges recently, by way of letters to the editor in rapid succession. The first is between two chief executives of a stock exchange, the second between two US readers of the paper.
Neal L. Wolkoff, Chairman and Chief Execitive of the American Stock Exchange, kicks off (here) with a reference to Roel C. Campos’ AIM ‘casino’ comment (see previous post) before going on to critise SOX as being ‘overly burdensome’ and laud AIM as a base for promoting Amex’s own The American Platform (TAP), the ‘junior equities market for micro and nanocap stocks based loosely on the examples of London’s AIM and Toronto’s Venture markets’ (source) and the US as ‘the home of capitalism’.
Clara Furse, Chief Executive of the London Stock Exchange, deals a blow in response (here). First she accepts the compliments, then points out that he ‘overstates the role of US regulation in the success of Aim’:
Aim is attracting companies from Australia, Canada, China, Germany, Israel, Ireland, Italy, and Sweden among many others. And the last time we checked, none of these countries was subject to the oversight of US regulation! […] [R]ather than navel-gazing based on the dubious premise that the US is “the home of capitalism”, they might be better served by accepting that the flow of capital is global and will seek out the most efficient and effective marketplaces.
Another point she could have made, which was noted in the Bloomberg/Schumer Report, is that ‘[f]or many AIM-listed companies, the US capital markets are never an option: thus far in 2006, for instance, fewer than half of the companies that listed on AIM would have met the lowest initial market capitalization requirements on NASDAQ.’ (p.50 (54 of 142))
In an open letter, Max W. Berger, of Bernstein Litowitz Berger & Grossman LLP, too notes that ‘roughly half the companies listed on AIM fall under the $50 million market capitalization for listing on the NASDAQ, and nearly 75% fall under the $100 million required for listing on the NYSE.’
Amex is currently awaiting approval from the SEC to create its junior market.
The second exchange, between Thomas Niles and Charles L. Trozzo, concerns the plaintiffs’ bar: just growing rich or doing so with benefits to the class the serve too?
What’s more: Add a third exchange to that, between US reader Charles Sieck and the Financial Times itself (editorial), on the issue of ‘Wall Street[’s] arguments for restricting class actions’, on the basis of Credit Suisse First Boston v Billing and Makor v Tellabs (see here and here for more on these cases).
Now the wait is on to see who will respond to this FT article, on the basis of the former case. Two quotes, including the conclusion, to get you started:
Other nations prefer to let experts oversee complicated sectors of the economy, such as their capital markets. We Americans, on the other hand, like to let Everyman sue Everybody: private lawsuits are a fundamental part of our system of economic regulation. […] The democratic legislature is the place to balance the goals of protecting investors and guaranteeing US capital formation. Amateur regulators, acting in their own interest, should stay off Wall Street.