After two days of non-stop cheerleading in the financial media about how great the NYSE takeover is for everyone, we stumbled on a story that seems to have been missed by the talking heads. Yesterday, Bloomberg reported:“NYSE Euronext was sued by shareholders seeking to block its planned $9.53 billion sale to Deutsche Boerse AG. The all-stock transaction is grossly inadequate and resulted from a flawed process, lawyers for shareholder Samuel T. Cohen said in a complaint made public today. There appears to have been no sales process, and the proposed transaction did not emerge from an auction, Cohen‘s lawyers said in the complaint. “A board that provides a would-be acquirer with an exclusive opportunity to bid on a company and fails to conduct a market-check, does not act in the interests of shareholders.” http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=acj63bYono2E
This, of course, will blow over and the lawsuit will most likely go nowhere since the powers-that-be have already sanctioned this deal. And it’s a good thing, because the NYSE executives can’t waste any more time and are already hard at work trying to figure out a name for the new exchange. Chuckie Schumer wants a good name. According to the FT, they have launched a competition among the combined companies 6,470 employees to help create a name. And to show that they are tech savvy, they are even using social media to help with the name. We’re sticking with “Hochfrequenz-Handel” which is German for High Frequency Trading. Can somebody tweet that to Niedermeyer for us?
Be sure to tune in today at 9:30am for the Joint CFTC-SEC Advisory Committee Meeting . Here is the link to access it: http://cftc.gov/PressRoom/Events/opaevent_cftcsec021811.html
The committee will discuss recommendations regarding events of May 6, 2010. Nine months after the Flash Crash and the committee is just about getting around to discussing a few things. This is just the way the HFT community and their supporters like it. Nice and slow and do nothing. Grind that reform train to a halt. After all, the market has come roaring back and if you didn’t sell on May 6th, then nobody got hurt. The HFT gang is in no rush to change anything. The last time this committee met in November of 2010 it was rather anti-climatic. If you remember, we published a note on what we expected the committee to recommend. Nothing has really happened since then, so once again, we publish what we think the committee will say and what we think they should do: “What the SEC Staff Will Likely Recommend in Reaction to the May 6th Flash Crash” http://www.themistrading.com/article_files/0000/0601/092410_WhitePaper.pdf
We fully expect to be publishing this same note again 6 months from now.