Interest paid, but no date yet, for gov't-backed stock market
First payment, three weeks early
New Castle County has collected its first interest payment on last year's $3 million loan to the proposed Delaware Board of Trade stock exchange.
Organizers have not given an updated target opening date for the market, which was supposed to open last spring, then over the summer.
The county this month received $180,000 -- six percent interest for one year -- "three weeks early," county council finance co-chair George Smiley, D-8th, who represents neighborhoods southwest of Wilmington City, told me.
DBOT, whose organizers included former Cincinnati Stock Exchange leader Richard Nieoff and former Philadelphia Stock Exchange official John Wallace, after passing earlier projected dates has now decided on a "soft opening," maybe in a few weeks, or this winter, Smiley added, after talking to DBOT officers at council's monthly finance committee meeting.
After raising cash from the county, DBOT leased offices in Wilmington's Hercules Building, a towering blue-glass landmark whose owners face foreclosure due to low tenancy.
While most U.S. securities trading has moved online and "off the floor" of the old New York Stock Exchange and the smaller trading floors that survive in Chicago and Philadelphia, DBOT organizers and their supporters in government have promised their exchange will attract well-paid traders to this city of 75,000 to list, buy and sell stocks of emerging companies that can't easily meet the listing requirements on the New York, Nasdaq and other established markets.
County council finance co-chair John Cartier, D-7th, who represents Claymont and other neighborhoods along the Delaware and bordering Delaware County, Pa., told me he is not convinced of the wisdom of the county's loan, which he attributed to lame-duck County Executive Tom Gordon and "those other maniacs" who advised Gordon.
DBOT staff including Mike Licciardelli, a Philadelphia native and veteran Wall Street trader, in early October circulated a glossy brochure to Wall Street trading firms, seeking financing for their exchange and its trading technologies. "They say they have a possible investor. They're not going to get more money from us," Cartier told me.
Last year DBOT supporters said they expected financial support from Wall Street veterans including former New York Stock Exchange chief Richard Grasso. But Grasso and others declined to fund the effort.
Since they began their latest fundraising attempt, DBOT officials haven't returned calls seeking comment. Over the summer they had told me they were hoping to secure approvals from FINRA, the industry body that registers the online markets that have proliferated since the SEC partly deregulated securities exchanges and telecom technology advances moved most trading online in the 2000s.
Gordon, a former county police chief, is completing his third (non-consecutive) term running the county, which is home to more than half of Delaware's population. Gordon lost September's primary election to lawyer Matt Meyer, who is scheduled to replace him in January. Meyer used the DBOT loan and reports of deteriorating county finances as campaign issues against Gordon.