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GAO Lauds Nasdaq for Improvements

April 30, 1999|From Bloomberg News

The Nasdaq Stock Market is doing a better job of checking out listing applicants and making sure listed companies comply with its standards, according to Congress' General Accounting Office.

The GAO report, released Thursday, said Nasdaq's Listing Qualifications Department has initiated at least 85 investigations that have resulted in companies restating their financial information, making corrective public disclosures and, in some cases, being delisted.

This represents a major change from 1997, when Nasdaq was faulted by the Securities and Exchange Commission for its role in letting Comparator Systems Corp. in Orange County sell shares from 1990 to 1996. Nasdaq was similarly faulted by the GAO in a report issued the following year.

Comparator in 1996 settled SEC charges that it inflated the value of its assets and defrauded investors of $2.9 million. Shares of the Newport Beach-based company rose 30-fold during a three-day period in May 1996 before they collapsed.

The SEC concluded afterward that Nasdaq failed to adequately check on Comparator's assets before listing its shares. The GAO reached a similar conclusion.

Nasdaq stiffened its listing requirements in the wake of those findings.

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