Tuesday, December 26, 2006
ELIOT'S NEW ROLE .
New York Post Editorial
As usual..the Post gets carried away with it's pro business stance....this country can ill afford to have another Enron Debacle....government oversight and regulation is always going to be part of the equation...and as Enron and WorldCom as shown a necessary one......Some compromise will have to take place to attract investment in new york....but not at the expense of us consumers/investors getting ripped off.....Eliot understands this....obviously the Post does not.........andy
December 26, 2006 -- Add another volume to the growing library documenting how New York's economy is being damaged by overly onerous, and largely needless, federal regulation.
Earlier this month the bipartisan Committee on Capital Markets Regulation, a group of 22 acclaimed financial academics and corporate leaders, released a study of the impact of heavy-handed government oversight of Wall Street.
The report has several targets, but its most pointed criticism is directed at the deleterious elements of the Sarbanes-Oxley (SOx) law passed in the wake of Enron and like scandals.
SOx exacerbates an older problem: out-of-control lawsuits from rapacious trial lawyers and other wannabe securities-fraud prosecutors, including many state attorneys general. The U.S. legal climate drives costs up dramatically, making it difficult for American companies to compete in the international marketplace.
The disparity is exacting an enormous toll on American capital markets, as detailed in the report:
* In the late 1990s, 48 percent of new stock offerings were executed on U.S. exchanges - compared to 8 percent today.
SOx is chiefly culpable. As the report's director told The Post's Paul Tharp, SOx's $4.3 million compliance fees "are absolutely killing the U.S. in terms of maintaining listings dominance."
* The cost of listing a $187 million market-cap company on the New York Stock Exchange is $153,000, on the London Stock Exchange $85,000.
* Annual fees on the NYSE $36,000, on the LSE $7,500.
* Underwriting fees for an NYSE IPO 5.6 percent, on the LSE 3.5 percent.
* While the value of IPO offerings on the NYSE rose slightly from $24.5 billion in 2005 to $26.5 million in 2006, or 8 percent, London jumped from $14.5 billion to $36.5 billion, or 152 percent.
As these columns have detailed, New York City takes a direct hit whenever a new listing is lost to a foreign exchange.
To help rectify this unhappy situation, the authors lay out a series of recommendations that have already received tacit endorsement from Sen. Charles Schumer and Mayor Bloomberg:
* Cut duplicative, redundant rulemaking - streamline securities regulation, and concentrate it on the federal level.
* Free small companies from SOx's reach.
* Restrict most lawsuits to executives and specific employees - allow action against entire companies only when they're "top-to-bottom criminal enterprises."
* Forbid state regulators (e.g., state AGs) from prosecuting financial industries governed by federal rules.
* Prevent stock manipulations by keeping investigations quiet so that companies' stock values aren't subject to an overnight implosion.
These last three recommendations appear directed at ending so-called Spitzer- ism - i.e., corrosive hyperactivity at the state level. Little surprise, then, the gov-elect's reaction. Spitzer told CNBC: "On a political level, I can tell you this report is dead on arrival."
"This is the product of nothing more than CEOs and a few financial-services companies who themselves were the target of prosecution," Spitzer said (notably overlooking the near entirety of the committee's membership).
Obviously taking this personally, Spitzer needs to recall his new title: governor - not attorney general. With liberals like Schumer and Bloomberg already on board, these levelheaded recommendations are clearly not part of some Big Business plot.
Having stated repeatedly his intention to help New York retain its title of undisputed financial capital of the world, Eliot Spitzer owes New York his full support of any proposal to do just that.
As usual..the Post gets carried away with it's pro business stance....this country can ill afford to have another Enron Debacle....government oversight and regulation is always going to be part of the equation...and as Enron and WorldCom as shown a necessary one......Some compromise will have to take place to attract investment in new york....but not at the expense of us consumers/investors getting ripped off.....Eliot understands this....obviously the Post does not.........andy
December 26, 2006 -- Add another volume to the growing library documenting how New York's economy is being damaged by overly onerous, and largely needless, federal regulation.
Earlier this month the bipartisan Committee on Capital Markets Regulation, a group of 22 acclaimed financial academics and corporate leaders, released a study of the impact of heavy-handed government oversight of Wall Street.
The report has several targets, but its most pointed criticism is directed at the deleterious elements of the Sarbanes-Oxley (SOx) law passed in the wake of Enron and like scandals.
SOx exacerbates an older problem: out-of-control lawsuits from rapacious trial lawyers and other wannabe securities-fraud prosecutors, including many state attorneys general. The U.S. legal climate drives costs up dramatically, making it difficult for American companies to compete in the international marketplace.
The disparity is exacting an enormous toll on American capital markets, as detailed in the report:
* In the late 1990s, 48 percent of new stock offerings were executed on U.S. exchanges - compared to 8 percent today.
SOx is chiefly culpable. As the report's director told The Post's Paul Tharp, SOx's $4.3 million compliance fees "are absolutely killing the U.S. in terms of maintaining listings dominance."
* The cost of listing a $187 million market-cap company on the New York Stock Exchange is $153,000, on the London Stock Exchange $85,000.
* Annual fees on the NYSE $36,000, on the LSE $7,500.
* Underwriting fees for an NYSE IPO 5.6 percent, on the LSE 3.5 percent.
* While the value of IPO offerings on the NYSE rose slightly from $24.5 billion in 2005 to $26.5 million in 2006, or 8 percent, London jumped from $14.5 billion to $36.5 billion, or 152 percent.
As these columns have detailed, New York City takes a direct hit whenever a new listing is lost to a foreign exchange.
To help rectify this unhappy situation, the authors lay out a series of recommendations that have already received tacit endorsement from Sen. Charles Schumer and Mayor Bloomberg:
* Cut duplicative, redundant rulemaking - streamline securities regulation, and concentrate it on the federal level.
* Free small companies from SOx's reach.
* Restrict most lawsuits to executives and specific employees - allow action against entire companies only when they're "top-to-bottom criminal enterprises."
* Forbid state regulators (e.g., state AGs) from prosecuting financial industries governed by federal rules.
* Prevent stock manipulations by keeping investigations quiet so that companies' stock values aren't subject to an overnight implosion.
These last three recommendations appear directed at ending so-called Spitzer- ism - i.e., corrosive hyperactivity at the state level. Little surprise, then, the gov-elect's reaction. Spitzer told CNBC: "On a political level, I can tell you this report is dead on arrival."
"This is the product of nothing more than CEOs and a few financial-services companies who themselves were the target of prosecution," Spitzer said (notably overlooking the near entirety of the committee's membership).
Obviously taking this personally, Spitzer needs to recall his new title: governor - not attorney general. With liberals like Schumer and Bloomberg already on board, these levelheaded recommendations are clearly not part of some Big Business plot.
Having stated repeatedly his intention to help New York retain its title of undisputed financial capital of the world, Eliot Spitzer owes New York his full support of any proposal to do just that.
