Report: American Stock Exchange Probes Link Between Officer, Investor
NEW YORK (AP) _ The American Stock Exchange is reportedly investigating a financial relationship between one of its governors and the controlling shareholder in a stock listed on its new Emerging Company Marketplace.
The New York Times said in today’s editions that the probe involves Robert J. Van Caneghan, a member of its board of governors, and Alfred Avasso, once the controlling shareholder in PNF Industries Inc., a New Jersey-based manufacturer of flame retardants.
The report said Van Caneghan was among the strongest advocates for listing PNF Industries on the new market, which was once seen as an idea that could bring new business to the American Stock Exchange.
The Times story said Avasso is a former Amex member who was barred from association with the exchange six years ago.
The exchange confirmed today that an independent examiner is investigating its selection procedures for the new listing and how PNF Industries got on the emerging company list.
It said trading in PNF stock was halted earlier this summer and that the exchange has begun proceedings to take the stock off the list. It said those proceedings are still pending before the Securities and Exchange Commission.
In a brief telephone interview today, Van Caneghan denied he had a financial relationship with Avasso and said he ″did nothing more than refer PNF Industries to the listing people and basically left it in their hands.″
He said he knew Avasso was associated with the company but did not tell the exchange officials at the time he referred PNF to the listings staff.
″I knew the company papers he filed at that time would list that,″ Van Caneghan said.
Efforts to reach Avasso through PNF Industries, based in Upper Saddle River, N.J., were unavailing today. A woman who answered the telephone at PNF said she did not know how he could be reached.
The company said in a news release dated Sept. 1 that Avasso had sold a 46.3 percent stake in the company on Aug. 28 to three top PNF executives. It said the sale cut Avasso’s holding in the company to less than 5 percent.
The Times story said the investigators found Van Caneghan has a personal financial relationship with Avasso, believed to involve loans between the men, but that Van Caneghan never disclosed this to the exchange either.
The Emerging Company Marketplace was set up about five months ago. It was created as a marketplace for issues that did not meet the Amex’s listing standards, but were expected to be future winners.