Hundreds of companies listed on US stock exchanges are being traded on the Berlin-Bremen Stock Exchange without their knowledge or consent. Among these companies are dual-listed Israeli shares of some of Israel’s leading companies.
A number of years ago, speculators listed these companies for trading in Germany, where short options were purchased for their shares. Representatives of the US Securities and Exchange Commission (SEC) recently discussed with the heads of the Berlin-Bremen Stock Exchange the listing of many small US companies on the latter exchange without the companies’ knowledge or consent. Local German regulators were present at these discussions.
Among the Israeli companies listed on the Berlin-Bremen Stock Exchange without their consent are Teva Pharmaceuticals (Nasdaq: TEVA; TASE: TEVA), Check Point (Nasdaq: CHKP), Amdocs (NYSE: DOX), Comverse Technology (Nasdaq: CMVT), Koor Industries (NYSE: KOR; TASE: KOR), Partner Communications (Nasdaq: PTNR; TASE: PTNR; LSE: PCCD), Mercury Interactive Corporation (Nasdaq: MERQ), Elbit Systems (Nasdaq: ESLT; TASE: ESLT), ECI Telecom (Nasdaq: ECIL), Given Imaging (Nasdaq: GIVN; TASE: GIVN), TTI Team Telecom International (Nasdaq: TTIL), AudioCodes (Nasdaq: AUDC; TASE: AUDC), Tower Semiconductor (Nasdaq: TSEM; TASE: TSEM), Taro Pharmaceutical Industries (Nasdaq: TARO), Radware (Nasdaq: RDWR; TASE: RDWR), and RIT Technologies (Nasdaq: RITT).
A number of companies are listed for trading on more than one German exchange. Comverse is listed in Berlin, Frankfurt, Hamburg, Hanover, Munich, and Stuttgart; Koor is listed in Berlin and Munich; TTI is listed in Berlin and Frankfurt; Radware is listed on five German exchanges; AudioCodes is listed in Berlin, Frankfurt and Munich; and Partner is listed in Berlin, Munich, and Frankfurt.
Adv. Uri Doron, of Jenkens & Gilchrist Parker Chapin in New York, who is representing several companies listed in this manner, says, “In most cases, the companies I represent knew nothing about it. We’re now taking steps to de-list these companies’ shares from trading in Germany.
"Several companies have been successful with de-listing; other companies' demands to de-list their shares have been rejected by the Berlin-Bremen Stock Exchange. It seems that some of the factors affecting the chances of success in de-listing from the Berlin-Bremen Stock Exchange are the period of time that the company has been listed, the trading volume of the stock on the exchange, and whether the shares are listed on other German exchanges. We will be working with German counsel to assist us with those companies whose de-listing demands were rejected."
The Berlin-Bremen Stock Exchange said in response that it had been granted SEC recognition as a stock exchange outside the US in October 2000. The Berlin-Bremen exchange, which lists 10,000 dual-listed companies, without any problems having been reported hitherto, said, “These shares are not listed for trading on our exchange, but traded in the Third Market Segment.” The other two parts of the exchange are official and supervised.
The Berlin-Bremen Stock Exchange also said, “To be dual traded on a German stock exchange, the security must be listed on another exchange requiring ongoing reporting, and ensuring market surveillance. Since this is the case for the Nasdaq OTCBB segment, such securities many be traded on German exchanges. Since the security is already publicly traded without restrictions as to who may purchase it, the consent of the company is not required.”
Regarding concern on the part of various companies about manipulation of their share prices, the Berlin-Bremen Stock Exchange said, “Irrespective of the market segment, price manipulation is a punishable act by German criminal law.”
Given Imaging said in response, “The Berlin-Bremen Stock Exchange listed us without our knowledge, and with any action on our part. We do not issue announcements, financial statements, or other material to them; they use our reports to the stock exchange in the US. As far as we know, the Berlin-Bremen Stock Exchange lists companies without a request from them, and that was the case with us.”
Koor and Teva said that they were unaware that their shares were listed on the Berlin-Bremen Stock Exchange.
Published by Globes [online] - www.globes.co.il - on June 9, 2004