Sunday, January 21, 2007

NASD Members Approve Merger

In an unusual Sunday morning press release, the NASD announced that its membership approved the merger of the regulatory function with the NYSE.

The press release trumpets "NASD member firms overwhelming approved" the bylaw changes to authorize the merger. While the release is full of other glowing language, labeling the vote a "mandate", the details reflect that 83 percent of the firms voted, and only 64 percent of those supported the change.

Overwhelming? A Mandate? 64% of the vote is hardly "overwhelming", and if my math is correct, that is only 53% of the members voting in favor of the proposal. While it might be unfair to analyze the vote including firms that did not vote, 53% of yes votes from eligible voters is hardly a mandate.

The SEC does the same thing. Glowing overstatements of marginal victories, and a failure to report losses in their enforcement actions.

The consolidation of regulatory functions is undoubtedly good for the regulated, but aren't we entitled to expect more honesty from our regulatory authorities?
Post a Comment