Levitt capitulates
Derivatives RULE... decimalization postponed to 2001... Levitt gives in to the major market manipulators.
March 7, 2000
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Levitt's Talks Not Improper,
A U.S. House Panel Decides
By MICHAEL SCHROEDER
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- A House government-oversight committee found nothing improper about the U.S. Securities and Exchange Commission chairman holding private meetings with securities-industry participants to discuss market issues.
Last month, the House Government Reform Committee's chairman, Dan Burton (R., Ind.), held an inquiry into whether private discussions by the SEC chairman, Arthur Levitt, may have influenced regulatory decisions.
The review was prompted by reports of a closed meeting Mr. Levitt had in New York in December with 11 of the nation's biggest brokerage firms, including Citigroup Inc.'s Salomon Smith Barney, Goldman Sachs Group Inc., Merrill Lynch & Co. and PaineWebber Group Inc. The agenda was reported to include discussion of the New York Stock Exchange's future.
The meeting raised questions about whether the largest Wall Street firms were serving as a private advisory group to Mr. Levitt as he considered actions the SEC should take to shape markets amid rapid technological change. Some smaller firms complained they were being cut out of the debate.
Mr. Burton said he was satisfied with Mr. Levitt's explanation of the private meetings but pledged to continue monitoring the practice.
In a Feb. 29 letter to Mr. Burton, Mr. Levitt said he held 88 private meetings last year with a wide range of broker dealers, exchanges, new electronic markets, mutual-fund companies and individual and institutional investors. A schedule of meetings, released by Mr. Burton, showed the larger firms tended to meet with Mr. Levitt most frequently. Meeting at least a half-dozen times last year were Merrill Lynch, Morgan Stanley and Goldman Sachs, as well as the largest online broker, Charles Schwab & Co.
"It is in the public interest for regulators to have the flexibility to foster candid discussion on matters as complex and important as the future of our securities markets," Mr. Levitt wrote. The meetings helped the SEC shape its thinking on a "concept release" last month, which asked whether markets are becoming more fragmented and offered six options to address potential problems, he said.
While the SEC produced no minutes from the meetings, Mr. Levitt said three issues accounted for a lion's share of the discussions. They were proposals to convert the NYSE and Nasdaq to for-profit organizations, the impact of technology on U.S. markets and option-market linkages.
The National Association of Securities Dealers, operator of the Nasdaq Stock Market, met with Mr. Levitt 20 times, either in groups or privately. The New York Stock Exchange was another frequent visitor, with 11 meetings.
Write to Michael Schroeder at mike.schroeder@wsj.com |
