Former Stock Exchange Leaders Call for Creation of 'Venture Exchanges'
David Weild, former Vice Chairman of NASDAQ and Edward Kim, former head of new products at NASDAQ, call for a new stock exchange model to reinvigorate the entrepreneurial growth economy, create jobs and drive innovation
NEW YORK, March 4, 2015 /PRNewswire/ -- IssuWorks, Inc. ("IssuWorks") announces an important new study entitled, "The U.S. Needs Venture Exchanges." Weild & Kim are known for their previous written work that inspired the JOBS Act. In this study they cite the loss of economic incentives that forced Wall Street to cut small company investment banking services, equity research coverage, sales and aftermarket support of small public companies. Weild & Kim document a wholesale collapse in the number of investment banks that once made up the U.S. small-cap "ecosystem." They call on Congress and the U.S. Securities & Exchange Commission (SEC) to create member-owned stock exchanges focused exclusively on the needs of sub $2 billion equity market value companies.
"Starting in the late 1990s, the United States drove down a path of one-size-fits-all stock markets tailored for large cap stock trading to the complete detriment of small cap stocks. The loss of sales and trading revenue caused Wall Street to pull the rug out from under the small company ecosystem that had supported higher levels of entrepreneurship and job growth," said Weild. IPOs suddenly dropped dramatically from the levels of the 70s, 80s and 90s. The number of major stock exchange listed operating companies dropped from 9,000 to 5,000. The percentage of start-ups dropped from 14% to 8% of all businesses (Robert Litan, Brookings Institute, Foreign Affairs, "Start-Up Slowdown").
"We hasten to point out that former SEC Chair Arthur Levitt's op-ed that appeared in yesterday's issue of the Wall Street Journal ('A Small-Cap Idea with Little to Recommend It') lacks any statistical information," continued Weild. "Most of the damage that was done to the small cap ecosystem, and in turn the US economy, came about due to changes in market structure, including the Order Handling Rules, Reg. ATS and Decimalization. These changes, not discussed in the op-ed, were introduced under former Chair Levitt's tenure at the SEC and form much of the basis for our recommendation that the United States develop a 'Venture Exchange' construct to revive the IPO market and job growth in this country."
About IssuWorks
IssuWorks is the brainchild of noted Wall Street executives, including David Weild and Ed Kim, whose work is credited with having led to The JOBS Act. IssuWorks uses technology, data and people to help corporate issuers and investment banks significantly improve the marketing and distribution of new issues and to better support companies in the aftermarket. This leads to better performance for public companies and their investors. The mission of IssuWorks is to be the global leader in equity distribution and marketing platforms to complement traditional investment banks. Our clients include both corporate issuers and investment banks. www.issuworks.com
About David Weild IV
David Weild is the Founder, CEO and Chairman of IssuWorks. He is a former Vice Chairman of The NASDAQ Stock Market. Weild is often referred to as the "Father of the JOBS Act" and has spoken in front of the US House of Representatives, the US Securities and Exchange Commission (SEC) and the thirty-four member nations of the Organization for Economic Co-operation and Development (OECD). He is recognized as a leading expert in stock market structure and how it impacts capital formation including initial public offerings (IPOs) and follow-on offerings. He has a BA in Biology from Wesleyan University and an MBA from the Stern School of Business.
About Edward Kim
Edward Kim is COO of IssuWorks. Ed has over 25 years of capital markets, finance, product development, and operations experience. Prior to helping form IssuWorks, he ran financial communications at Stern And Company, a strategic communications and public relations firm. Ed was formerly head of new products for the corporate client group at The NASDAQ Stock Market. Ed has worked in investment banking, trading, research and equity capital markets at firms including Lehman Brothers, Prudential Securities, and Robertson Stephens. He has a BS in Materials Science and Engineering from the Massachusetts Institute of Technology.
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SOURCE IssuWorks, Inc.
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