SME Venture Exchanges (Part One): CFA Institute Report Examines Link between Fraud and Lower Listing Standards (Podcast)
From NYSE Euronext’s planned launch of a pan-European exchange for small and medium-sized enterprises (SMEs) to the 2012 U.S. JOBS Act, the issue of how small firms can leverage capital markets for long-term funding is gaining momentum. In many cases, however, these efforts are attempting to unwind rules adopted in response to the reporting problems of many small, start-up companies in the late 1990s.
To help CFA Institute and regulators better understand the potential risk to investors and trust in financial markets, CFA Institute commissioned a report on the topic, Exchanges and Their Investors: A New Look at Reporting Issues, Fraud, and Other Problems by Exchange. Jim Allen, CFA, head of capital markets policy at CFA Institute, recently caught up with the report’s author, York University finance professor Douglas Cumming, J.D., Ph.D., CFA, to discuss whether companies listed on venture exchanges have greater reporting problems, instances of fraud, and other issues when compared with companies listed on more established securities exchanges.
