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Corporations and securities brief ~ SEC passes controversial stock rule change

[JURIST] Leading Wednesday's corporations and securities law news, the SEC [official website] has approved the extenstion of the "trade-through" rule to electronic exchanges which will subject the vast majority of stock transactions to guidelines designed to give investors the best stock price. Chairman William Donaldson [official biography] cast the deciding vote in a rule widely opposed by companies including Nasdaq [official website] and discount brokers Charles Schwab Corp. [corporate website] and Fidelity Investments [corporate website]. The concern is that the measure will make buying large blocks of stock at a certain price difficult. The rule will be tested by a small group of stocks starting April 10, 2006, with all trading centers being required to comply on June 12, 2006. The SEC has a webcast of the meeting. Read the proposed regulation NMS [PDF]. The Street.com has more.

In other news...

  • The US textile and clothing industry are asking the government to re-impose quotas on 14 categories of clothing to protect American manufacturers. Officials believe the industry will be decimated if China is allowed to continue the current heavy flow of products into the country which began on January 1, 2005. When China was allowed into the WTO [official website], the US had an agreement where it could limit textile imports from China throught 2008. The American Manufacturing Trade Action Coalition [advocacy website] has more on the subject. AP has more.

  • Goldman Sachs Group Inc. [corporate website] said in an SEC filing, that it has settled two disputes related to over the counter derivatives with Enron Corp [corporate website; JURIST Hot Topic news archive]. The defunct energy giant wanted to recover $45 million and other damages due to the early termination in 2001 of a trading agreement with Goldman. Terms of the settlement were not disclosed. AP has more.

  • Federal Reserve Chairman Alan Greenspan [official biography] told the Senate Banking Committee [official website] in a prepared statement [text] that Congress should impose restrictions on the size of the portfolios held by mortgage giants Fannie Mae [corporate website] and Freddie Mac [corporate website]. Greenspan said the creation of a strong regulator would not be enough. The prospect of new legislation related to the mortgage giants appears strong in the wake of the accounting scandals at the two firms. Watch video of Greenspan's testimony. AP has more.

  • The Wall Street Journal is reporting [subscription req'd] Cablevision Systems Corp. [corporate website] has made a $16.5 billion all-cash offer for the assets of Adelphia Communications Corp [corporate website]. The Cablevision bid still faces a rival joint bid by Comcast Corp. [corporate website] and Time Warner Inc. [corporate website] which is valued at $17.6 billion in cash and stock. AP has more.

  • The board of MCI Inc. [corporate website] has rejected an $8.9 billion takeover bid by Qwest Communications [corporate website]. The move allows its $7.5 billion deal with Verizon Communications Inc. [corporate website] to go forward. The board reiterated worries about the value of Qwest shares and whether Qwest can meet its forecast for cost savings with the merger. However, MCI did indicate it is open to further discussions with Qwest. Read the MCI press release. AP has more.

  • Pulitzer Inc. [corporate website] announced in a SEC filing that the agency wants to review the company's preliminary proxy materials which are part of its plans to be acquired by fellow newspaper publisher Lee Enterprises Inc [corporate website]. Pulitzer shareholder still need to approve the $1.46 billion deal [Pulitzer press release]. AP has more.

  • The Wall Street Journal is reporting [subscription req'd] federal regulators investigating bond insurer MBIA [corporate website] have expanded their probe to determine if the company had a second secret agreement with reinsurers. The investigation centers on an alleged agreement in which MBIA had an agreement with reinsurer Channel Re to protect the firm from losses resulting from claims it transferred to it. CBSMarketWatch has more.

  • The US Army [official website] announced a settlement with Kellogg Brown & Root (KBR) [corporate website], a subsidiary of Halliburton Corp., where it will pay $1.18 billion for dining services in Iraq and Kuwait thereby resolving a payment dispute that has been in contention since December 2003. The Army will retain $55 million out of about $200 million in payments to KBR that had been suspended due to the dispute. Read the KBR press release. AP has more.
Click for previous corporations and securities law news.

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