From Spiegel Online, an article about how large German corporations are packing up and leaving the American capital markets.
On June 18, the symbol of the German company Deutsche Telekom, DT, made its last run across the ticker at the New York Stock Exchange. Europe’s largest telecom company left the world’s biggest and most recognizable exchange after nearly 14 years of trading.
The company is currently in the process of delisting from all foreign exchanges and will soon only be traded on its home stock market in Frankfurt.
Deutsche Telekom is just the latest German blue chip to say goodbye to the American capital market. In an emblematic departure, Daimler, the first German firm to be listed in New York in 1993, officially quit trading on the NYSE on June 4, saying that it no longer needed a presence in New York to attract international investors. And Munich-based insurance and financial services giant Allianz abandoned the NYSE last fall.
Why are they leaving? The short answer: Sarbanes-Oxley.
All but three of 16 German companies that are or were at one time listed on the NYSE began trading on the exchange before 2002, riding the mergers and acquisitions wave of the 1990s — just before the US government stepped up compliance rules with the Sarbanes-Oxley Act, which became law on July 30 of that year.
Why is this a problem?
Complying with the SEC can require a small army of people. Sarbanes-Oxley came around at the right time for companies to delist.” German firms cross-listed in the United States spent between €10 and €15 million annually on SEC compliance, a survey conducted by Stadtmann and his colleagues found.
Yeah, I know. Just a bunch of right-wingers complaining about modern space-age regulation. And look at the benefits.
The double-digit costs of SEC complaince, however, are paltry compared the hundreds of millions of dollars in liability — either through lawsuits or investigations and prosecutions — to which a US listing can expose foreign firms. Shareholders can take companies to court far more easily under SEC regulations than those of Germany’s stock market regulator. And the US Justice Department and the SEC have been more assertive in investigating publicly traded companies following a wave of investment fraud schemes like the one by former Nasdaq chief Bernard Madoff, who swindled prominent investors out of billions.
So real, producing companies have to pay tens of millions because of money changers like Madoff. That makes perfect sense.
And the clincher:
For their part, officials at Deutsche Telekom and Daimler say there are fewer reasons to miss a listing in New York these days. Advances in electronic and Internet trading allow foreign investors to buy and sell shares directly in Frankfurt instead of going through foreign listings in New York, London and Tokyo. Even for large investment firms, it no longer matters if a company is traded in Bombay, Belgrade or New York.
So these idiots in New York, and their fellow idiots in DC are about to get a cold shower. They don’t own a monopoly any more. They can’t abuse people and companies simply because they guard the bridge.
Now you can see why the progs want so badly to regulate the internet.