The New Deal's Public Utility Holding Company Act of 1935 is a knout which can be used to flay the backs of investment bankers holding controlling blocks of utilities stock. The act's description of a holding company fits any investment house which directly or indirectly controls more than 10% of a utility's voting stock. Such a house feels the knout until: 1) it gets rid of its holdings; or 2) registers as a holding company, thereby submitting to SEC regulation, a penitential hair shirt which no investment banker wants to wear.
Until last week...
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