Both Amex and NASDAQ are similar since both the companies are based on the stock market. Both handle major clients and many different exchanges. Both also deal with the buying and selling of stocks. Each is widely known and capitalizes on their investors.
There are some differences in the operations of two companies. NASDAQ is more of a corporate's corporation. It handles mostly technological clients and uses technology to electronically handle everything. Amex on the other hand, likes to be more personalize and does not handle everything electronically. Amex uses floor exchanged and is thought to be slower in handling things. NASDAQ is extremely competitive and continues to try to find way to better its company.
In September 2002, New York State Attorney General Eliot Spitzer sued five corporate executives (former WorldCom chief executive Bernard Ebbers, Qwest chairman Philip Anschutz, former Qwest CEO Joseph P. Nacchio, Metromedia Fiber chairman Stephen Garofalo and former McLeod CEO Clark McLeod) for repayment of funds garnered through profiteering in Initial Public Offerings (IPOs) and phony stock ratings given by Salomon Smith Barney in return for investment banking business. In January 2003, Spitzer reached a "global" settlement with top Wall Street firms. They pledged to pay $1.4 billion to settle federal and state charges. Bernard Ebbers was head of WorldCom. WorldCom had merged with one of the biggest technological companies MCI in April, 2003. This was one of the biggest technological mergers. This merger had broken up monopolies such as AT&T that had dominated the telephone industry. But after the scandal WorldCom was changed. The company filed for bankruptcy. For a time, WorldCom (WCOM) was the United States' second largest long distance phone company. (Liqi, 2006).
PART - II
Economic Functions of Financial Intermediaries
Financial intermediaries are involved in performing very important economic function of channelizing the excess funds that depositors have, towards satisfying the fund requirements of the borrowers. Financial intermediaries aggregate small amounts of funds into big pools, then invest it in a diverse portfolio of primary securities to achieve more efficient diversification of risk than an individual investor. In this way, financial intermediaries are able to use savings that would otherwise not have been available to produce economic activity.
Brokers' Roles in Financial Markets
Brokers perform very important function in financial markets. They obtain relevant information that is required by the clients to make informed investment decision. This information ranges from market conditions to government regulations. In addition, brokers carry out clients' portfolio investment planning and provide guidance to the clients about most optimal investment decisions. Brokers have high level of control of a financial market.
However, the advent of internet has brought about changes in the way businesses are conducted. The financial markets are no exception. NASDAQ makes use of the internet to provide value added information to the clients. The investment