Driving capital markets offshore.In 2005, 24 out of 25 of the year's largest initial public offerings (IPOs) took place outside the United States. Does that mean American capital markets are losing their appeal? A new study says yes. In a working paper for the Committee on Capital Markets Regulation, Luigi Zingales of the University of Chicago Graduate School of Business Recruiters also voice a strongly positive opinion of students. According to BusinessWeek's biannual MBA rankings: "Chicago's grads were hands-down favorites in our survey of companies that hire MBAs. writes that "while in the late 1990s the U.S. capital market was attracting 48 percent of all the global IPOs, its share has dropped to 6 percent in 2005 and is estimated to be only 8 percent in 2006." Many companies listing outside their native stock exchange have chosen to list in London rather than New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . Why the decline? Among other causes, Zingales points to "excessive regulation and overly burdensome litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. risk." On the regulatory front, he suggests rethinking the requirements of the Sarbanes-Oxley Act See SOX. , the strict accounting and securities reform that was passed after the Enron scandal broke. On the litigation front, he cites an increase in the total value of the settlements in securities class action lawsuits class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax from $150 million in 1997 to $9.7 billion in 2005. [GRAPHIC OMITTED] |
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