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Would 'Nas-mex' clear?
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March 12, 1998: 12:35 p.m. ET
Analyst says a merger between the two could bring competitive issues
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NEW YORK (CNNfn) - Talks are underway between the Nasdaq and American Stock Exchange for a possible merger. A union of the two exchanges could bring potential competitive problems, much like the mergers among corporations.
Harvey Saferstein, partner with Chadbourne & Parke, said a merger could be opposed if the government thought it would lead to higher prices and less competition.
Saferstein joined anchor Deborah Marchini on CNNfn's "Before Hours." The following is a partial transcript of that interview.
MARCHINI: Harvey, welcome. Good morning.
HARVEY SAFERSTEIN, CHADBOURNE & PARKE: Good morning.
MARCHINI: First I have to start by asking you about the talks underway, between the Nasdaq and American Stock Exchange, to merge, can you see any competitive problem with those.
SAFERSTEIN: Sure, I can. You know, we always look at markets. This is the classical market, and we have three of them. And the merger of (two of them), leaving only two would probably cause competitive inquiry by somebody. In this case probably the Securities and Exchange Commission.
MARCHINI: I was going to say the Justice Department doesn't have jurisdiction over these markets the way it does over private corporations, does it?
SAFERSTEIN: No. But you must remember the Justice Department is the one that investigated the Nasdaq trading scandal, which alleged price fixing. So anything goes and antitrust is king these days.
MARCHINI: That is right. Securities and Exchange Commission, you said, could have something to say as well?
SAFERSTEIN: Yes.
MARCHINI: Is there any reason to believe that they might oppose it?
SAFERSTEIN: Sure, if they think it would lead to higher prices and less competition they might say: "You might think it's a great idea but we don't think so." Same as any other merger.
MARCHINI: As you noted a moment ago, antitrust is king these days in Washington. Boy, we sure have been woken up to that fact after years of being relatively quiet and complacent, the Justice Department has become very aggressive in terms of some pending mergers. What do you think changed?
SAFERSTEIN: We changed presidents. And we got eight years, sort of, in the middle of eight years. That changed judges, and that changed the head of the antitrust division. And we had two changes there: We had one coming in the first term Ann Bingham and now Joel Klein. And another change was at the Federal Trade Commission. And those two compete. We have two agencies and they literally compete with each other for antitrust cases, so all those things are happening. 
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