Boston University School of Law

October, 2006

ssNeal Wolkoff, Alumnus and American Stock Exchange, Inc. CEO, Featured on Forbes Cover

Neal Wolkoff (’80), Chairman and Chief Executive Officer of the American Stock Exchange, Inc. (Amex), hopes to rescue the 164 year old institution "from scandal and financial misery" and make it safe again for investors.

Amex, whose market capitalization and trading volume is dwarfed by the exchanges such as the NYSE and NASDAQ, has been reeling since the Justice Department began investigation in connection with an options trading scandal. Amex, once an innovator in exchange traded-funds, has seen its market share in that business dip from 98 to 65 percent. Its role as the center of stock options trading is no more, having been relegated to a mere fourth in volume. Long the incubator on Wall Street for new and untested ventures, Amex has been exposed to scandal and financial misery.

Wolkoff, named chief executive in April 2005, hopes to turn around Amex's fortunes through more oversight as shown by the doubling of the institution's annual regulatory budget. He's also pushed Amex's technical capabilities to keep up with the NASDAQ and the Big Board. His efforts are slowly being felt. Already, the Amex has made an undisclosed profit in the first half of 2006 -- the first in five years -- and pulled in $137 million in revenue, as compared to $216 in all of last year.

He's also raised the number of listings, particularly among SPACs (special purpose acquisition companies). These companies benefit from Amex's less-stringent listing rules, though each SPAC must make an acquisition within 18 months.

At this point, the Amex is a safer bet than what it used to be; however, it can still be a "casino," as Wolkoff points out: "If you invest in these companies, you're taking a risk."

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Reported by Martin Lacdao