Wednesday, April 23, 2008

Three quick notes

1. The internet and proxy votes.

A story in today's WSJ tells us that since the SEC has allowed companies to use e-proxy rather than old-fashioned paper and ink proxy ballots, voting rates have declined.

The authors of the story seem unclear what the psychology here is. Possible explanations include the aversion of older shareholders to anything internet-driven. Presumably as they die off, (or as the more flexible of them catch on) the numbers will go back up.

Or it could be a pointless statistical fluke. Correlation isn't causation.

2. Biovail shake-up.

There's a new chief executive and a new chairman of the board at Biovail, the company that was once featured on Sixty Minites as an example of short-seller-driven stock price manipulation. Bill Wells is the new CEO, Douglas Squires the new chairman.

Also, Bill Bristow has left the board of directors, "effective immediately," the company said on April 21, "due to his ongoing personal relationship with Eugene Melnyk."

In the eyes of the present leadership, apparently, the company's earlier problems which I discussed in early March weren't the consequence of speculators and paid-for false research reports after all. They were the consequence of the flawed leadership of company founder Eugene Melnyk.

3. SEC to Grassley: Let it be.

At some point about three years ago the SEC was investigating the broker-dealer Bear Stearns over the way it priced and valued about $63 million of collateralized debt obligations. But last year the investigation was quietly dropped. I'd like to that that someone at the SEC simply decided that whatever Bear was doing wrong had turned out to be self-punishing given the events of last month. But the chronology doesn't really work out there, does it?

Senator Grassley doesn't want to let the matter go. On April 2, he wrote the SEC asking for information on their investigation.

SEC chairman Christopher Cox replied last week: “The commission does not disclose the existence or non-existence of an investigation or information generated in any investigation unless made a matter of public record in proceedings brought before the Commission or the courts."

Short paraphrase: "Oversight, Schmoeversight."

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