Short Interests: Levitt leaving with bang, not whimper

Departing Securities and Exchange Commission Chairman Arthur Levitt didn’t mince words last week in addressing the throngs that piled into Philadelphia’s Arch Street Meeting House for his final town hall meeting for investors.

“Both in the private sector and during my time at the commission,” he said, “I’ve come across a number of instances that, quite frankly, do not honor an investor’s rights – instances where conflicts of interest cast doubt on the motivation of a broker, analyst or corporate manager; where hidden costs hurt an investment’s bottom line; where spin and hype mask the true performance of a mutual fund; and where accounting tricks and sleight of hand dress up a company’s financial results.”

Mr. Levitt said that while investors should expect protection from all of the above, they are also obliged to ask as many questions as possible to make sure they’re not getting fleeced.

“As an investor, you certainly have the right to be treated fairly, to get straight answers,” he said. “But as an investor, you also have the obligation to ask questions, many questions, to seek out information and contemplate your own tolerance for risk.”

Where dividends never end

Talk about winning streaks.

Memphis-based First Tennessee National Corp. plans to pay out a dividend to shareholders – for the 418th consecutive quarter.

For those who can’t do the math quickly, that means the bank holding company has been giving shareholders a piece of earnings since 1896.

This quarter’s dividend, payable April 1, is 22 cents per share. First Tennessee was founded in 1864 and has grown to $18.6 billion in assets.

The Europeans

are coming, again

Get ready for another year of invasions from overseas.

A forecast by New York-based PricewaterhouseCoopers predicts that foreign buyers will drive mergers and acquisitions in the financial services industry. European companies, specifically, will be the most aggressive acquirers, the forecast says.

One reason is that getting into the enormous U.S. market is crucial to any global expansion.

Also, unlike their U.S. counterparts, Europeans are used to operating with the banking, money management, brokerage and insurance industries combined. That means the prospect of, say, a bank acquiring an insurer is a comfortable one.

And, the forecast says, with many regional banks and national brokerages competing in the fractured U.S. marketplace, ample opportunity exists for European financial services groups to pick up a company or two.

High-profile unions last year included Donaldson Lufkin & Jenrette Inc. becoming part of Credit Suisse First Boston – whose parent is Zurich-based Credit Suisse Group – and Paine Webber Group Inc. going into the fold of Zurich-based UBS AG.

A patch of hope

Newspapers in both New York City and the San Francisco Bay area last week ran front-page articles indicating that the white-hot real estate markets are cooling. A Tuesday article in The New York Times said landlords are actually lowering rents and negotiating fees for the first time in recent years. But the article in Wednesday’s Marin Independent Journal was less sanguine. Home prices and rents have not yet softened, but there’s been a more subtle shift to the north of the Golden Gate Bridge. Sellers are bothering to fix doorknobs and slap on a coat of paint. Until recently, most houses could be sold for more than the asking price “as-is.”