A 'Sad Day' at Sovereign

From the start, most had thought the dissidents' overture to the NYSE was unlikely to bear fruit. The NYSE has no history of blocking a corporate deal. Moreover, the Big Board never has been viewed as a particularly tough or adventuresome regulator.

In fact, just hours before the NYSE gave its seal of approval to the amended deal, one of the institutional investors opposing the transaction had urged the Big Board not to settle for a compromise solution like the one announced Tuesday.

"Respectfully, the NYSE can reject or require a shareholder vote on the pending transaction,'' said Orin Kramer, chairman of the New Jersey Investment Council, in a Tuesday letter to NYSE Regulatory Chairman Richard Ketchum. "But a revised transaction eliminating particularly offensive provisions but which amounts to a change in control without a vote will, in our judgment, only intensify the public debate."

The New Jersey Investment Council makes investment decisions for the state's pension system. The NYSE officials declined to comment on the Sovereign matter.

At the moment, the best hope of dissidents may be the intercession of a crusading regulator in the mold of New York Attorney General Eliot Spitzer. But don't look for Spitzer to get involved, especially after a federal judge recently chastised him for trying to probe the home-lending practices of the nation's big banks.