Remember Rule 2290, NASD’s (National Association of Securities Dealers) response to the growing concern that fairness opinions weren’t quite…fair? Filed in its final form with the SEC in April 2006, Rule 2290 was intended to address any potential conflicts of interest when underwriters or other transaction participants (lenders, market makers, asset managers, etc.) also render an opinion on the deal’s financial fairness to shareholders. The SEC received a smattering of comment letters, but nearly a year later, there has been no confirmation or update. Contact with Treasury sources has led us to conclude that for now at least, Rule 2290 appears to have fallen into a bureaucratic black hole (bogged down by the heavyweight of investment banking firms, perhaps?)
The courts continue to show interest—evidenced by the recent ratification of the NYSE merger with Archipelago Holdings, Inc., in which the Judge lamented that fairness opinions have become “watered down and toothless.” For BVR’s telephone conference on “Fairness Opinions,” featuring Shannon Pratt, Craig Jacobson (the senior analyst who led Willamette’s independent appraisal in the NYSE case) and Jeff Tarbell—in a CD or transcript, click here.
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