September 18, 2000

The Honorable Arthur Levitt, Jr.
Chairman
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Mr. Salvatore F. Sodano
Chairman and Chief Executive Officer
American Stock Exchange LLC
86 Trinity Place
New York, New York 10006-1572

The Honorable David M. Walker
Comptroller General
U.S. General Accounting Office
441 G Street, N.W.
Washington, D.C. 20548

Dear Chairman Levitt, Messrs. Sodano and Walker:

Recent press reports, "Has The Curb Market Moved Into The Gutter?", Business Week, September 11, 2000 at p. 136 (copy enclosed), indicate that the American Stock Exchange (Amex) has developed a bad case of amnesia and may be in the process of repeating its Emerging Companies Marketplace (ECM) debacle. To refresh the Amex’s recollection, I am transmitting to it copies of documents related to the Congressional investigation of that mess.

With respect to the current issues and concerns, I am writing to request that the SEC and the Amex look into the concerns raised in the Business Week article and provide me with a response by the close of business on Friday, October 20, 2000. Among other things, your report should address the SEC’s oversight in this matter as well as the Amex’s screening process for listing candidates and for a company to remain listed on the exchange. In light of the issues raised at the September 13, 2000, Finance Subcommittee hearing on organized crime’s involvement in the markets for the smallest microcap stocks, please also advise whether Amex has an effective screening mechanism for identifying persons with questionable backgrounds.

I also am writing to ask that the General Accounting Office (GAO) update its May 1994 report, American Stock Exchange: More Changes Needed in Screening Emerging Companies for the Marketplace. The Amex Board of Governors voted to discontinue the ECM in 1995 but recent press reports suggest that Amex’s new listings bear a striking resemblance to the companies that joined ECM. Accordingly, I request that GAO conduct an audit of the Amex listing department and provide me with information on (1) Amex’s screening procedures for assessing the reputations of the management and stockholders of companies seeking a listing and (2) the extent to which Amex ensures that companies approved for listing meet all criteria required for such approval. We should discuss whether this audit needs to be extended beyond the Amex.

Thank you for your cooperation with these requests. I look forward to reviewing your reports. Maintaining the integrity of our securities markets and the protection of investors should be one of our highest priorities.

Sincerely,

JOHN D. DINGELL
RANKING MEMBER

Enclosure

cc: The Honorable Tom Bliley, Chairman
Committee on Commerce

The Honorable Michael G. Oxley, Chairman
Subcommittee on Finance and Hazardous Materials

The Honorable Edolphus Towns, Ranking Member
Subcommittee on Finance and Hazardous Materials