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| 2003
News and Press Releases |
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HEADLINE ARCHIVED:
SEC CHIEF SAYS GIVE NYSE CHANCE TO POLICE FLOOR
By: Susanne Craig and Gaston F. Ceron
The Wall Street Journal, November 10, 2003
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EXCERPT: Securities and Exchange Commission Chairman William Donaldson says there was a "distressing breakdown" in the regulation of New York Stock Exchange floor-trading "specialists," but that the Big Board's new directors should be given a chance to grapple with the regulatory issue before the SEC weighs in. "My own feeling is . . . that if in fact a truly independent board has been created then we need to give that board a chance to make its own decision," Mr. Donaldson told reporters attending the annual meeting of the Securities Industry Association, Wall Street's main lobby group. Last week, The Wall Street Journal reported that the SEC, in a confidential report, blasted the NYSE for failing to police its elite floor-trading firms and for ignoring blatant violations in which investors were shortchanged by millions of dollars in trades involving more than two billion shares over the past three years. Mr. Donaldson's comments were his first public comments on the report, which has renewed calls from investors and others for the NYSE to completely sever its regulatory unit. The exchange's interim chairman, John Reed, has proposed what he says is a "revolutionary" overhaul of the NYSE's corporate governance, including a redesigned and slimmed-down board of independent directors that would oversee the exchange's governance and supervise its regulatory functions. A separate advisory panel would include representatives from groups such as the securities industry, institutional investors and listed companies, but would have no fiduciary responsibilities. Mr. Reed has said while there is room to improve the work of the regulatory unit, he believes it should be kept in house. Friday, he said the NYSE's regulatory arm could soon report up to a new, independent board, which he hopes will go a long way to solving some of the unit's current woes.
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