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Spoofing, Surveillance and Supervision

Jay Biondo, Product Manager - Surveillance at Trading Technologies, co-authored an article along with James Lundy and Nicholas Wendland, both of Drinker Biddle & Reath LLP, reviewing the CFTC's regulations and expanding efforts, 21st century surveillance and supervision, as well as strategic recommendations.

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January 1, 2003

Nasdaq Bargain Basement Sale?

By Gregory Bresiger

Nasdaq isn't about to waive its $1 minimum price for listing, Nasdaq officials insist. That's despite comments by lameduck Nasdaq chief executive Hardwick Simmons. He said that the minimum rule might be dropped to help good companies going through through some bad times.

"We have no immediate plans to take action on the minimums. And beside a lot of those Nasdaq stocks have been rising above a dollar recently," a Nasdaq spokesman said. No rule changes are immediately pending on the minimum trading requirement.

Several sources within Nasdaq said that Simmons' comments came as a big surprise to them and that there is no immediate plan to change the minimum listing requirements. They now specify that a stock be below $1 for at least 30 cumulative trading days before there is a hearing to consider delisting it. Opinion was divided on what would happen.

"I think his comments [Simmons] are sensible. We should be lenient with companies. These are very hard times," said Nick Ponzio, president of Hill Thomson Magid, a bulletin board firm. He said that "everyone has been going through hard times,"noting that Nasdaq has seen a market cap loss of trillions of dollars in the past two years.

Others contend that Nasdaq must act to protect its stream of trading revenues from the many companies that hover around the $1 mark. "I don't they're going to change the requirements. Waiving them probably wouldn't be good for Nasdaq," said Cromwell Coulson, chief executive of the Pink Sheets. He said that Nasdaq will likely shift the below dollar entries to its new planned, BBX, (Bulletin Board Exchange), which is expected to begin operations this summer. But Ponzio cautioned that BBX still faces many hurdles.

Couslon also said that Nasdaq can pressure troubled companies to execute reverse splits. This would take many of them over the $1 mark, he said. Coulson added that Nasdaq is likely counting on an upturn in the market to solve its problems.

Several hundred of Nasdaq's 3,800 stocks had fallen below the one dollar price earlier this year as tech stocks have tanked.