The Nasdaq declined to comment specifically on China Energy Savings Technology, but noted that there have been no allegations of fraud brought against newly listed companies since 2006. Kara Brockmeyer, an assistant director with the SEC, declined to comment on China Energy Savings beyond what was disclosed in documents published by the SEC.
The exchanges have requirements that control the activities of their own staff, as well. Staff are not permitted to trade in stocks that are seeking a listing. While there have been no flagrant conflicts of interest among staff, shorts have called attention to staff entanglements that raised questions, particularly for Nasdaq. The exchange declined to discuss those entanglements, treating them as a personnel matter.
The Pros Look to the SEC
Wall Street professionals tend to downplay the importance of the exchanges in guarding against fraud. Professionals point out that the securities traded on a major exchange must be registered with the SEC. They look to the SEC for oversight.
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