WASHINGTON — The SEC will appeal a Washington administrative judge’s decision to dismiss the agency’s case against former American Stock Exchange Chairman Salvatore Sodano for failing to enforce securities trading laws and rules, said SEC spokesman John Heine. “The division believes the decision is limited to jurisdictional issues and does not address the merits of the division’s allegations concerning Mr. Sodano’s conduct,” he said.
In an order Aug. 20, the judge dismissed the SEC’s order instituting proceedings against Mr. Sodano for failing to enforce compliance with securities laws and rules when he headed the Amex from 1999 to January 2005. The SEC filed its proceedings seeking censure against Mr. Sodano in March 2007, saying Amex had allowed multiple options trading violations, including trading ahead of customer orders. The judge dismissed the case because Mr. Sodano no longer worked for the Amex at the time the SEC filed its case.
The SEC has 21 days to appeal.
Nymex looks for buyer, considers sale of HQ
NEW YORK — NYMEX Holdings, parent of the New York Mercantile Exchange, is looking for a buyer willing to pay “a meaningful premium” over its current stock price, according to a statement. Executives of the world’s largest energy exchange executives held “talks with certain parties regarding a potential business combination” after briefing institutional investors and analysts on Aug. 20.
Nymex management “confirmed that it is studying the sale of its building, with a possible $500 million windfall,” said Edward Ditmire, analyst at Fox-Pitt, Kelton, adding that projected cost savings of $250 million would involve “a 100- to 150-person reduction, representing a 15%-25% reduction” of overall staff.
Among the potential buyers rumored to be interested in Nymex are: NYSE Euronext, which has announced its intention to expand in the futures business; CME Group, which already handles electronic trading for Nymex contracts; Deutsche Boerse, which is seeking U.S. expansion; and Dubai Holdings, Nymex’s joint-venture partner in the newly launched Dubai Mercantile Exchange.
Nasdaq to divest 31% stake in LSE
NEW YORK —Nasdaq plans to sell its 31% stake in the London Stock Exchange, with J.P. Morgan Securities and UBS Investment Bank as advisers.
“The market has not recognized the value of our stake in the LSE,” CEO Robert Greifeld told analysts in a conference call Aug. 20. He noted that Nasdaq’s current stock price does not “adequately reflect” its LSE stake, acquired last year. Nasdaq shares trade at a p/e ratio of 27.5, which is low compared with the ratios of other U.S. exchanges.
Nasdaq will not sell its 31% stake, worth about $1.6 billion, to a single buyer because a 25% stake gives the owner a blocking vote.
Nasdaq plans to use $1 billion of the LSE sale to retire senior debt and use the remainder to repurchase shares.
Mr. Greifeld reiterated Nasdaq’s commitment to buy OMX, the Scandinavian global trading technology provider and owner of OMX Nordic Exchange, where seven Nordic and Baltic markets trade. A Dubai government-owned holding company made a rival bid for OMX in August.
