Blake Hornick and Michael Dunn Published in Financier Worldwide
“The Decline of the U.S. Capital Markets”

In the September issue of Financier Worldwide, New York Corporate attorneys Blake Hornick and Michael Dunn authored an article on the current state of U.S. Capital Markets and offer suggestions on how to improve the situation.

Blake and Mike point out that not only is the number of companies listed on a U.S. Exchange down dramatically from a decade ago, but the number of completed IPOs has also decreased as companies are opting instead for a sale to a private equity buyer or a primary liquidity event. There has also been a migration to foreign markets. Blake and Mike point out that many blame this decline on over-regulation, citing such laws as Sarbanes-Oxley and Dodd-Frank. On the flip side, they write that a variety of deregulatory measures in the past quarter century have actually made it less profitable for market participants and more difficult for companies to consummate small and medium-sized IPOs.

Blake and Mike write that it is clear that steps must be taken -- some re-regulatory and some de-regulatory -- to spur capital formation. One such item, they point out, is the pending legislation to make Regulation A more available and to increase the cap for Regulation A offerings from $5 million to $50 million. More ways to support the middleman are also needed, as well as ways to encourage companies to go public and stay public with regulation at a reduced level.