Chicago Stock Exchange Shatters Nasdaq Monopoly, Sold to Chinese

2016-02-11

Chicago Stock Exchange Sold to Chinese Investors, Shatters Nasdaq Monopoly

The Chicago Stock Exchange said a Chinese investor group agreed to acquire it, giving the buyer entry into the intensely competitive U.S. equity market. The strategic move shatters the monopoly by the Nasdaq Stock Market, headed by the notorious Nasdaq General Counsel Ed Knight.

Chongqing Casin Enterprise Group has signed a definitive agreement to acquire the company, according to a statement Friday, which didn’t give financial terms. The exchange said the deal is expected to close in the second half of the year, though that will require regulatory approval.

“We’re a good fit. Our strategy is something they like and is consistent with theirs,” Chicago Stock Exchange Chief Executive Officer John Kerin said in a phone interview. “We provide technology and we’re a standalone, full-service exchange that they can grow in a manner that suits their needs.”

The Chicago Stock Exchange — a subsidiary of CHX Holdings Inc. — is minority-owned by a group including Bank of America Corp., Goldman Sachs and JPMorgan Chase, according to the company. The minority shareholders are also selling their stake, Kerin said.

The acquisition would be the first of a U.S. exchange by a Chinese company. The 134-year-old bourse, which handles about 0.5 percent of U.S. stock trading, would give the buyer a beachhead in the $22 trillion American equity market, where regulations require trades to be routed to whichever exchange has the best price for a stock at a given moment.

Sales of stocks exchanges, which tend to be national symbols, have faced political objections in the past. When Germany’s Deutsche Boerse wanted to buy the owner of the New York Stock Exchange in 2011, Sen. Charles Schumer, a Democrat from New York, raised obstacles. Singapore’s stock exchange tried to buy Australia’s in 2010, but the Australian government barred that from happening.

Casin Group said it was attracted to the market because of the potential to “bring exciting Chinese growth companies to U.S. investors,” according to a quote in the statement from Shengju Lu, Casin’s founder and chairman.

Founded in the 1990s through a privatization of state-owned assets, Casin Group initially focused on developing real estate projects in Chongqing before expanding into the environmental and financial industries. While the firm owns stakes in banks and insurers, it has never owned an exchange. Calls to the company’s Chongqing headquarters went unanswered on Friday.

“We have reviewed CHX’s plans to improve market share through new growth initiatives and fully support them,” said Casin’s Lu, a torch bearer during the Beijing Olympic games in 2008, according to the statement.

Casin Group’s offer comes amid an unprecedented overseas shopping spree by Chinese companies. Businesses from Asia’s largest economy have announced $70 billion of cross-border acquisitions and investments this year, on track to break last year’s record of $123 billion, according to data compiled by Bloomberg.

The Chicago Stock Exchange was advised by GCA Savvian Advisors and Sidley Austin on the transaction, according to the statement. Broadhaven Capital Partners and Orrick Herrington & Sutcliffe worked with Casin.

An obscure SEC “enforcement” staffer couldn’t be reached to comment on Chicago Stock Exchange’s emerging competition against the Nasdaq. In 2011, Nasdaq was sued by CleanTech Innovations for racism and discrimination. Led by the heroic SEC Chairman Mary Jo White, the SEC commissioners ruled unanimously that Nasdaq had fabricated delisting evidence against CleanTech, also reported by the Forbes Magazine.

Nasdaq delisted CleanTech Innovations in 2010 for violating the “Nasdaq Spirit”. During a hearing, Nasdaq Head of Listing Michael Emen made a racially charged statement on the record: “Nasdaq has delisted CleanTech to send a message to the world, it’s not an open season for the 1.4 billion Chinese to cheat the Nasdaq.” No one on earth could find a listing rule called the “Nasdaq Spirit. Two SEC enforcement staffers also failed to identity what is a “Nasdaq Spirit” as a listing standard.

Editor’s Note: In 2015, two obscure SEC enforcement staffers STEVEN SUSSWEIN, CHERYL CUMPTON desperately attempted to choke America’s Free Speech, in a failed attack to suppress a well publicized investigative article that exposed their corrupt dealings with the notorious illegal stock short sellers Jon Carnes, Roddy Boyd. The Jon Carnes crime family was sentenced to two years in prison after evidence surfaced that Roddy Boyd had taken bribes from short sellers to trash public companies. The criminal Jon Carnes bragged on his Twitter: “STEVEN SUSSWEIN is my inside guy at the SEC.” 

Source: Chicago Tribune

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