Study of Corporate Tax Shelters Wins Jensen Prize

A publication documenting the impact of tax shelters on corporate debt policy by researchers at Duke University’s Fuqua School of Business and Pace University’s Lubin School of Business has been awarded the coveted 2006 Jensen Prize for Corporate Finance and Organizations, presented by the Journal of Financial Economics (JFE).

FOR IMMEDIATE RELEASE

CONTACTS: Bill Caldwell, Pace University, 212-346-1597, wcaldwell@pace.edu;
Chris Privett, Duke University, 919-660-8090, chris.privett@duke.edu

STUDY OF CORPORATE TAX SHELTERS WINS JENSEN PRIZE

Researchers found shelters not only save tax payments but enhance attractiveness to investors

New York, NY – June 11, 2007 – A publication documenting the impact of tax shelters on corporate debt policy by researchers at Duke University’s Fuqua School of Business and Pace University’s Lubin School of Business has been awarded the coveted 2006 Jensen Prize for Corporate Finance and Organizations, presented by the Journal of Financial Economics (JFE).

The study, published in the September 2006 issue of the JFE, found that use of corporate tax shelters not only lets organizations avoid billions of dollars in annual tax payments, but also helps companies enhance their attractiveness to investors by reducing levels of debt and therefore leverage and risk.

The study also explores some commonly used tax shelters and the characteristics of firms that have employed these shelters.

Major companies, major financial advisors. Each year, the editorial office of the JFE collects votes from readers for the best papers published by the Journal. The prize is named for Michael C. Jensen, Jesse Isidor Straus Professor of Business Administration, Emeritus at the Harvard Business School and Founding Editor of the JFE.
Finance professors John R. Graham of Duke’s Fuqua School of Business and Alan L. Tucker of Pace’s Lubin School of Business collected the largest known sample of tax sheltering corporations, including such household names as BB&T Corp, Colgate-Palmolive Company, Compaq, Fleet Boston Financial Corp., Microsoft, United Parcel Service and Winn-Dixie. The shelters were devised or brokered by firms including Goldman Sachs, Merrill Lynch and Twenty First Security Corporation.

The paper presents an overview and analysis of eight common tax sheltering strategies used by the companies in the sample. Many of the strategies involve use of foreign partners or subsidiaries, or corporate-owned life insurance plans.

$1bn in annual deductions. The researchers demonstrated that sheltering firms have debt-to-total asset ratios that are one-third lower than comparable firms that do not use tax shelters. Because they have less debt, companies that use tax shelters appear less risky to investors. According to the researchers, this reduced debt can lead to better credit ratings, cheaper borrowing rates and less risk of violating corporate covenants.

The median tax shelter led to tax deductions of about $1 billion per year.

Graham and Tucker also identified the characteristics of firms most likely to use tax shelters. The researchers found large firms, firms with foreign operations and those with substantial research and development expenses were most likely to use tax shelters. This analysis should help investors, or the IRS, identify the types of firms that might be likely to use tax shelters.

The published version of Graham and Tucker’s paper, “Tax Shelters and Corporate Debt Policy,” is available at Elsevier’s ScienceDirect web site http://www.sciencedirect.com/science/journal/0304405X .

Duke’s Fuqua School of Business was founded in 1970. The school’s mission is to educate business leaders worldwide and to promote the advancement of business management through research. For more information, visit www.fuqua.duke.edu .

Pace’s Lubin School of Business is accredited for both business and accounting by AACSB International, an elite distinction shared by fewer than 3% of business schools worldwide. With a tradition of practice-oriented curriculum, the School has achieved national recognition for both its graduate and undergraduate programs in U.S.News & World Report and other media. Approximately 5,000 students are enrolled in Lubin’s undergraduate, graduate and professional degree programs in Downtown and Midtown New York City, and Pleasantville and White Plains in Westchester County, New York. Prominent alumni include Melvin Karmazin, CEO, Sirius Satellite Radio; James Quinn, president, Tiffany & Co.; Ivan Seidenberg, chairman and CEO, Verizon; Marie Toulantis, CEO, Barnes&Noble.com; and Richard Zannino, CEO, Dow Jones & Company. www.pace.edu/lubin

Robert J. Shiller to Discuss “The New Financial Order” at Pace University Symposium, April 18

The Sixth Annual Henry George Symposium will be held at Pace University, April 18 at 6 p.m.

Contact Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

MEDIA ADVISORY

April 6, 2006

FROM REAL ESTATE AND DOT-COM BUBBLES TO A NEW FINANCIAL ORDER, ROBERT J. SHILLER TO SPEAK AT PACE UNIVERSITY APRIL 18

Economist exactly predicted onset of dot-com bust

WHAT: Sixth Annual Henry George Symposium at Pace University. Robert J. Shiller of Yale University, the economist and New York Times best-selling author who wrote the book “Irrational Exuberance,” which exactly predicted when the dot-com bust kicked in, and who in the just-published second edition predicts the popping of the real estate bubble, will be the sixth Henry George Symposium speaker at Pace University’s Lubin School of Business.

His topic will be “The New Financial Order: Risk Management in the Emerging Economies.”

Past Henry George symposia have drawn such distinguished – and controversial – economists as Joseph Stiglitz, Nobel Laureate in Economics and Professor of Economics and Finance at Columbia University; and William J. Baumol, noted Professor of Economics at New York University and Professor Emeritus at Princeton University.

WHEN: Tuesday, April 18, 6 PM

WHERE: Pace University Downtown Campus, Student Union, One Pace Plaza, New York City.
Open to the public. Media admission by press pass.

WHO: Shiller is the Stanley B. Resor Professor of Economics, Department of Economics and Cowles Foundation for Research in Economics, Yale University, and fellow at the International Center for Finance, Yale School of Management. He received his BA from the University of Michigan in 1967 and his Ph.D. in economics from the Massachusetts Institute of Technology in 1972. He has written on financial markets, financial innovation, behavioral economics, macroeconomics, real estate, statistical methods, and on public attitudes, opinions, and moral judgments regarding markets.

His 1989 book Market Volatility (MIT Press) is a mathematical and behavioral analysis of price fluctuations in speculative markets. His 1993 book Macro Markets: Creating Institutions for Managing Society’s Largest Economic Risks (Oxford University Press) proposes a variety of new risk-management contracts, such as futures contracts in national incomes or in real estate that would permit the management of risks to standards of living. His book Irrational Exuberance (Princeton 2000, Broadway Books 2001, 2nd edition Princeton 2005, and in 15 foreign language editions) is an analysis and explication of speculative bubbles, with special reference to the stock market and real estate. His book The New Financial Order: Risk in the 21st Century (Princeton University Press, 2003, 2004, and in 8 foreign language editions) is an analysis of an expanding role of finance, insurance, and public finance in our future.

He has been research associate, National Bureau of Economic Research since 1980, and has been co-organizer of NBER workshops: on behavioral finance with Richard Thaler since 1991, and on macroeconomics and individual decision making with George Akerlof since 1994.

He serves as Vice President of the American Economic Association, 2005 and President of the Eastern Economic Association, 2005. He writes a column “Finance in the 21st Century” for Project Syndicate, which publishes around the world.

NYSE Chairman and NASDAQ CEO to Keynote Pace University’s Securities Industry Conference

12th Annual Securities Industry Conference at Pace University’s Lubin School of Business will take place on Oct 19. This year’s theme is “Planning for the Future of the Securities Industry” and the keynote speakers are: Paul E. Steiger, Managing Editor, The Wall Street Journal interviews Marshall N. Carter, Chairman, New York Stock Exchange, Larry Ingrassia, Business & Finance Editor, The New York Times interviews Robert Greifeld, President & CEO, The NASDAQ Stock Market.

MEDIA ADIVSORY

Contact: Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

Note: Members of the media must RSVP to attend. Email wcaldwell@pace.edu .

September 8, 2005

NYSE CHAIRMAN MARSHALL CARTER AND NASDAQ CEO
ROBERT GREIFELD TO KEYNOTE PACE UNIVERSITY’S
SECURITIES INDUSTRY CONFERENCE, OCTOBER 19

Wall Street Journal Managing Editor Paul Steiger and New York Times Business & Finance Editor Larry Ingrassia to conduct interviews with keynote speakers

Panels to include heads of major securities exchanges and firms exploring new challenges and future trends

WHAT: 12th Annual Securities Industry Conference at Pace University’s Lubin School of Business. Theme: “Planning for the Future of the Securities Industry.”

WHO: Morning Keynote: Paul E. Steiger, Managing Editor, The Wall Street Journal interviews Marshall N. Carter, Chairman, New York Stock Exchange. Luncheon Keynote: Larry Ingrassia, Business & Finance Editor, The New York Times interviews Robert Greifeld, President & CEO, The NASDAQ Stock Market.

Panels include prominent leaders in the securities industry: Brandon Becker, co-Chair, Securities Department, Wilmer, Cutler, Pickering, Hale & Dorr; Paul Bennett, SVP & Chief Economist, New York Stock Exchange; Alfred R. Berkeley, Chairman, Pipeline Trading Systems; William J. Brodsky, Chairman & CEO, Chicago Board Options Exchange; Andrew M. Brooks, VP & Head, Equity Trading, T. Rowe Price; David Colker, CEO & President, National Stock Exchange; Mike Cormack, President, The Archipelago Exchange; Marc Frimet, Managing Counsel, The Bank of New York; Richard G. Ketchum, Chief Regulatory Officer, New York Stock Exchange; Matthew Lavicka, Equities Managing Director, Goldman Sachs; H. Bruce McEver, Chairman, Berkshire Capital Securities; Derek Morris, SVP, Program Trading Business Development, BNY Brokerage; Annette L. Nazareth, Commissioner, Securities and Exchange Commission; Brett W. Redfearn, Senior Managing Director, Bear Stearns & Co.; Wayne Wagner, Chairman, Plexus Group Inc; Neal L. Wolkoff, Chairman & CEO, The American Stock Exchange.

WHEN: Wednesday, October 19, 2005, 7:30 a.m. to 4:30 p.m.

WHERE: The Michael Schimmel Center for the Arts, Pace University, One Pace Plaza (entrance on Spruce Street between Gold Street and Park Row), New York, NY.

Visit http://www.pace.edu/lubin/freundcenter for more information about the conference.

Pace Experts Available to Discuss Post Election Economic Issues

Flat tax. Estate tax. Interest rates. Inflation. As these and other economic and financial issues get fresh consideration in post-election Washington and around the country, we encourage you to look for expertise to Pace University, the closest university to Wall St.

MEDIA ADVISORY

Contact: Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

November 30, 2004

PACE FACULTY EXPERTS AVAILABLE FOR YEAR-END COMMENT
ON POST-ELECTION ECONOMIC ISSUES

Flat tax. Estate tax. Interest rates. Inflation. As these and other economic and financial issues get fresh consideration in post-election Washington and around the country, we encourage you to look for expertise to Pace University, the closest university to Wall St.

Flat tax and estate tax

Law professor Bridget J. Crawford joined the Pace Law School faculty after more than six years of law practice at Milbank, Tweed, Hadley & McCloy, LLP in New York. Her practice was concerned with income, estate, and gift tax planning for individuals, as well as tax and other advice to closely-held corporations and exempt organizations.

A former lecturer in law at the University of Pennsylvania Law School, her publications include articles on the income taxation of trusts, tax aspects of asset protection, and women in legal education.

Contact: 914-422-4416 (office), bcrawford@law.pace.edu .

Inflation, monetary and fiscal policy, international finance

Robert H. Parks, PhD, is an economist and professor of finance at Pace University’s Lubin School of Business. Parks is an expert on the impact of monetary and fiscal policy and international financial policy on debt, equity, and foreign exchange markets.

Having served as chief economist for duPont Glore Forgan, Blyth Eastman Dillon, and Advest Institutional Services, and with industrial forecasting experience as an economist with General Electric, he also heads up his own firm counseling institutional investment officers and corporate comptrollers.

He publishes The Money and Capital Markets Monitor, a newsletter distributed to international investors, and is the author of two books on Wall Street.

Contact: 212-346-1952 (office), 914-923-6117 (home), rparks@pace.edu .

Sarbanes-Oxley Act, ethics, nonprofit governance, social responsibility of business

Joseph M. Pastore, Jr., PhD, is professor emeritus of corporate ethics and strategy at Pace University’s Lubin School of Business. Pastore has authored, co-authored, or edited over forty articles, monographs, papers, and book chapters and has lectured in executive development programs for Verizon Communications, British Telecommunications, AT&T, Swiss Re, Monsanto, IBM, Prudential-Bache Securities, Technicon, Corning, Reader’s Digest, and Dresser Industries. He has consulted for i3 Mobile, RKS Consulting, Bendheim, Cube Computers, Findim, S.p.A., Big Apple Enterprises, Parenting Magazine, and Virtual Reality, Inc.

Pastore served as a Dean, Provost and/or Executive Vice President over a 23 year period at St. Bonaventure University, Boston College, and Pace University and is currently Chair of the Board of Trustees for Siena College in Loudonville, New York.

Pastore also served as the U.S. District Court-Appointed Monitor overseeing the Order to Desegregate the Yonkers Public Schools (U.S. v. Yonkers) from 1986 to 2002 when he mediated a $300 million settlement of school litigation.

Contact: 914-773-3520 (office), 914-762-4052 (home), pastore@pace.edu .

Daniel P. Tinkelman, PhD, CPA, teaches financial accounting, auditing, and financial statement analysis at Pace University’s Lubin School of Business. His major areas of research are charities and accounting for nonprofit organizations.

An independent accounting consultant, he has been engaged by counsel on various civil litigation matters and has served as a consulting accounting expert for Law & Economics Consulting Group; as vice president of Finance and Administration, for WPP Group North America; and as an auditor for Arthur Andersen & Co.

Contact: 212-618-6414 (office), dtinkelman@pace.edu .

Pace University. As a private metropolitan university, Pace has a growing national reputation for offering students opportunity, teaching and learning based on research, civic involvement and measurable outcomes. It is one of the ten founders of Project Pericles, developing education that encourages lifelong participation in democratic processes. Pace has seven campuses, including downtown and midtown New York City, Pleasantville, Briarcliff, White Plains (a graduate center and law school), and a Hudson Valley Center at Stewart International Airport near Newburgh, N.Y. Approximately 14,000 students are enrolled in undergraduate, graduate and professional degree programs in the Dyson College of Arts and Sciences, Lubin School of Business, School of Computer Science and Information Systems, School of Education, Lienhard School of Nursing and Pace Law School. www.pace.edu

Discontents about Globalization to be Discussed by Joseph Stiglitz, Nobel Laureate in Economics

The Fifth Annual Henry George Symposium at Pace University’s Lubin School of Business. Topic: “Globalization and its Discontents.”

Contact: Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

MEDIA ADVISORY

November 1, 2004

DISCONTENTS ABOUT GLOBALIZATION TO BE DISCUSSED
BY JOSEPH STIGLITZ, NOBEL LAUREATE IN ECONOMICS
AND FORMER HEAD OF CLINTON’S COUNCIL OF ECONOMIC ADVISORS
AT PACE UNIVERSITY SYMPOSIUM, WEDNESDAY, NOV. 3

WHAT: The Fifth Annual Henry George Symposium at Pace University’s Lubin School of Business. Topic: “Globalization and its Discontents.”

WHO: Joseph Stiglitz, PhD, Nobel Laureate in Economics. Awarded the Nobel Prize for economics in 2001 for helping to create the “Economics of Information” exploring the consequences of information asymmetries and contributing to concepts of adverse selection and moral hazard, Stiglitz is professor of economics and finance at Columbia University. He served as chief economist and senior vice-president of the World Bank from 1997-2000, a member of the Council of Economic Advisors during the Clinton Administration and later chairman (1993-1995).

Author of many books and articles, including “The Roaring Nineties” and “Globalization and Its Discontents,” Stiglitz has made major contributions in fields bearing on his topic: macro-economics and monetary theory, development economics and trade theory, public and corporate finance, theories of industrial organization and rural organization, and theories of welfare economics and of income and wealth distribution.

His work has reawakened interest in the circumstances in which markets do not work well and how selective government intervention can improve performance. “For pursuing truth in economics, for refusing to bend to the will of conventional thinking, and for his commitment to finding a better way for the world to do business,” Stiglitz received the honorary degree of Doctor of Humane Letters from Pace University in 2004.

A follow up discussion with Robert Isaak, PhD, Henry George Professor of International Management at Pace University’s Lubin School of Business and author of the book “The Globalization Gap,” will address “The Global Gap between Rich and Poor: Trends & Policies.”

WHEN: Stiglitz lecture on Wednesday, November 3, 6:30 p.m. Follow up discussion on Tuesday, November 9, 12:15 p.m.

WHERE: Pace University, One Pace Plaza, New York City. Stiglitz lecture: Multipurpose Room. Follow up discussion: Lecture Hall North.

New Twist on Orientation to “College 101” -The Basis of Credit-to be Taught at Pace University

Sponsored by the Education Foundation of the American Banking Association as part of its second annual Get Smart About Credit Day, Miriam Solomon, Financial Education Specialist of Citigroup will kick off a series of at least 11 visits by Citigroup people to “College 101” classes at Pace University, teaching students how to use credit responsibly and build a positive payment history.

CONTACT: Helen Steblecki, 718-248-4694, helen.steblecki@citigroup.com
Or Bill Caldwell, Pace University, 212-346-1597
Or Chris Cory, Pace University, 212-346-1117, ccory@pace.edu

October 18, 2004
FOR IMMEDIATE RELEASE
New York, NY

NEW TWIST ON ORIENTATION TO ‘COLLEGE 101’ – THE BASICS OF CREDIT —
TO BE TAUGHT AT PACE UNIVERSITY DOWNTOWN CAMPUS
BY CITIGROUP VOLUNTEERS

WHO: First-year students in the “College 101” course at Pace University’s downtown campus
(across from City Hall)

WHEN: Thursday, October 21 at 11:00 noon

WHERE: Pace University downtown campus
1 Pace Plaza (on Park Row at Spruce St. opp. City Hall)
New York, NY

Press Registration not required, but if you call in advance we will have a security pass waiting for you.

—————————————————————————————————————
NOTE: Pace is one of the most active sites in this city wide education program, has a cross-section of students, and is easy to reach.

Sponsored by the Education Foundation of the American Banking Association as part of its second annual Get Smart About Credit Day, Miriam Solomon, Financial Education Specialist of Citigroup will kick off a series of at least 11 visits by Citigroup people to “College 101” classes at Pace University, teaching students how to use credit responsibly and build a positive payment history.

On National Get Smart About Credit Day employees from financial services institutions from across the country visit colleges, high schools, freshman orientations, youth groups, and continuing education classes to teach young people the do’s and don’ts of credit before they get their first credit card.

This year, Citigroup employees are volunteering to teach lessons on credit in 40 cities reaching over 5,000 young people across the U.S. The Citigroup family of companies includes Citibank, CitiFinancial, CitiMortgage, Primerica, Smith Barney and Travelers Life and Annuity.

NASDAQ Stock Market President & CEO Robert Greifeld to Speak at Pace Forum

Paul Maidment, executive editor of Forbes and editor of Forbes.com, will interview Robert Greifeld, President and CEO of The NASDAQ Stock Market, Inc., the largest U.S. electronic stock market.

Contact: Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

MEDIA ADVISORY

NOTE:
Seating is extremely limited. Members of the media must RSVP to wcaldwell@pace.edu

September 27, 2004

NASDAQ STOCK MARKET PRESIDENT & CEO ROBERT GREIFELD
TO SPEAK AT PACE UNIVERSITY’S GLOBAL FINANCE
LEADERSHIP FORUM, SEPTEMBER 29

WHAT: Global Finance Leadership Forum: “Open Dialogue with Robert Greifeld.” In a year and a half at NASDAQ, Mr. Greifeld has expanded NASDAQ operations and questioned the value of floor-based exchanges in an electronic era. He has been a vocal advocate for modernizing market structure and increasing public company CEO attention on the performance and quality of stock markets for the benefit of company shareholders and all investors.

This is the fourth event of its kind organized by the Lubin School’s Center for Global Finance. Past forums have featured World Bank president James D. Wolfensohn; Congressman Michael Oxley (R-Ohio); Robert D. Hormats, vice chairman of Goldman Sachs International; John Lipsky, chief economist of J.P. Morgan Chase & Co.; and Paul Volcker, former chairman of the Federal Reserve Board. The event is hosted by the Center for Global Finance and the Accounting Department of Pace University’s Lubin School of Business, in conjunction with Forbes.com and Gartner Inc.

WHO: Paul Maidment, executive editor of Forbes and editor of Forbes.com, will interview Robert Greifeld, President and CEO of The NASDAQ Stock Market, Inc., the largest U.S. electronic stock market.

WHEN: Wednesday, September 29. Continental breakfast at 8 a.m. Discussion from 8:20 to 9:30 a.m.

WHERE: Forbes Building, 60 Fifth Avenue (between 12th and 13th Streets), New York City.

GREIFELD OFFICIAL BIO: After joining NASDAQ on May 12, 2003, Greifeld rapidly took steps to sharpen the company’s strategic direction, focusing its mission on being the premier U.S. equities market. This included an emphasis on providing the most efficient, transparent trading platform for investors by leveraging NASDAQ’s fundamental market structure advantage; capturing the majority of U.S. IPOs, and attracting listings from competitive exchanges.

Tapping his 20-year industry experience and leadership with electronic trading systems, Greifeld has led a significant enhancement of NASDAQ’s trading offerings. In March 2004, he oversaw the launch of NASDAQ’s Market Center — a newly integrated system capable of trading of all NASDAQ, NYSE, AMEX-listed securities and exchange traded funds on a single electronic platform. In January of 2004, Greifeld spearheaded NASDAQ’s innovative “dual listing” program, which for the first time allowed NYSE-listed companies to list on NASDAQ. This innovative initiative made worldwide news and significantly ratcheted up the debate regarding efficient electronic markets versus manual, floor-based exchanges. Greifeld has been a vocal advocate for modernizing market structure and increasing public company CEO attention on the performance and quality of stock markets for the benefit of company shareholders and all investors.

Most recently, Greifeld led NASDAQ’s decision to acquire BRUT ECN from SunGard Data Systems (NYSE: SDS), a transaction which closed on September 7. The BRUT acquisition provides NASDAQ trading systems with additional capabilities, including advanced order routing and marks another milestone in NASDAQ’s multi-pronged growth strategy.

Greifeld is an active speaker on market structure and regulatory issues and, as CEO of a public company, has been an active supporter of Sarbanes-Oxley reforms and the use of stock options as a tool for business and economic growth. He has addressed organizations including The Investment Company Institute, the National Press Club, and the World Economic Forum.

Prior to joining NASDAQ, Greifeld was an Executive Vice President with SunGard Data Systems Inc., a $6.2 billion market cap company, where he was responsible for all of SunGard’s sell-side businesses and its buy-side transaction routing businesses.

Greifeld holds a Masters in Business from New York University, Stern School of Business and B.A. in English from Iona College. His graduate school thesis was on the operation of The NASDAQ Stock Market.

Greifeld was recently named Chairman of the USA Track & Field Foundation.

Pace Unveils New Monthly Index of Downtown NY Progress

The economy of Lower Manhattan is picking up steam, according to the June figure from the new Pace Downtown Index (PDI), the city’s first comprehensive economic indicator for Lower Manhattan. The monthly index, announced today, was developed by Pace University’s Center for Downtown New York (CDNY).

Contacts: Chris Cory
Director of Public Information, Pace University
212-346-1117, cell 917-608-8164, ccory@pace.edu

Martha Cid or Jordan Friedman
M Booth & Associates,
212-481-7000

Jennifer Falk
Mayor’s Press Office, (212) 788-2958

Bryan A. Evans
Director of Public Affairs
Alliance for Downtown New York, Inc.
212-835-2770, cell 917-825-3452, bevans@DowntownNY.com

EMBARGOED: FOR USE AFTER 12:01 AM TUESDAY, JULY 13 An executive summary of methodology, a scientific paper on how the index was created, the June figures, and co-investigators’ biographies are at www.pace.edu/paceindex. Information about the index is also available on www.LowerManhattan.info.

PACE UNIVERSITY UNVEILS NEW MONTHLY INDEX
TO GAUGE REVITALIZATION OF DOWNTOWN NEW YORK ECONOMY

First public figures show increase in last several months
and improvement over a year ago

NEW YORK, NY, July 6, 2004 – The economy of Lower Manhattan is picking up steam, according to the June figure from the new Pace Downtown Index (PDI), the city’s first comprehensive economic indicator for Lower Manhattan. The monthly index, announced today, was developed by Pace University’s Center for Downtown New York (CDNY).

In a single statistic, the PDI measures economic and business activity in downtown New York, the capital of global finance. It tracks economic progress as a weighted average of four variables, two representing activities in the financial markets and two representing the commercial real estate market and the city’s overall economy. The selected variables are the S&P 500 Index, the Federal Funds Rate, the total commercial real estate inventory in Lower Manhattan, and the Gross Lower Manhattan Product.

On the third Thursday of each month Pace will announce the latest Pace Downtown Index figure at 10 AM on the University’s website, www.pace.edu/paceindex, as well as on the City’s website, www.LowerManhattan.info. The PDI was developed with assistance from the New York City Mayor’s Office and the Alliance for Downtown New York.

Powerful addition. “The PDI is a convenient way for planners and policy makers in business, government and the nonprofit sector to assess the direction and size of changes in the level of economic activity in this area, which is undergoing stress and revitalization,” said David A. Caputo, President of Pace.

Daniel L. Doctoroff, New York City’s Deputy Mayor for Economic Development & Rebuilding, added: “The Pace Downtown Index is a powerful addition to our efforts to provide essential information on Lower Manhattan and its recovery, and it complements our information dissemination efforts through our award-winning website www.LowerManhanttan.info. This website centralizes news from City, State, and Federal agencies, along with organizational partners, to provide a single, trusted source of information that empowers and inspires individuals to build their futures in Lower Manhattan. Throughout the redevelopment of Lower Manhattan, Pace University has been a true community partner, and thanks to their commitment to the City, we now have an invaluable tool to track downtown’s economic growth and recovery.”
Carl Weisbrod, President of the Alliance for Downtown New York said “The PDI is a welcome addition to the information gathered on Lower Manhattan. I am sure that in concert with the other data that is available, it will be a valuable tool for anyone interested in the economic health of Lower Manhattan and New York City generally.”
Fledgling CPI or Dow. “The latest findings confirm that the downtown economic engine is revving up,” said Daniel Slippen, Director of Pace’s Center for Downtown New York. “Even though the downtown economy has a long way to go before reaching pre-9/11 levels, the PDI findings certainly suggest that downtown New York has no intention of relinquishing its premier status as the global capital of commerce.”

Slippen added that “by developing the PDI, the Center for Downtown New York is fulfilling its mission as a partner in research and leadership for the city and its broader communities.”

In fact, “this index is a bellwether of broader economic health,” said economist Joseph Morreale, one of four PDI co-investigators and Pace’s Provost and Vice President for Academic Affairs. He likened the PDI to a fledgling version of such well-known indices as the Consumer Price Index and the Dow Jones Industrial Average.

Boundaries of “downtown.” The PDI is currently at 93.11 (July 1996 equals 100.00). Morreale noted that it has been tracking upward for the past several months in pilot testing. The June level was 0.7 percent higher than the 92.47 registered a year earlier, in June 2003. The rate is rising on the heels of recent announcements on jobs growth and investor confidence in the financial markets and blueprints for rebuilding Ground Zero.

The geographic boundary of downtown New York used in compiling the Pace Downtown Index consists of postal zip codes that include Canal Street south to Battery Park between the East and Hudson Rivers. These zip codes are 10002, 10004, 10005, 10006, 10007, 10013, 10038, 10041, 10048, 10152, 10270, 10271, 10272, 10278, 10279, 10280, 10281, 10282, 10285, 10286, and 10292.

Though the PDI has just gone public, Morreale said, the Pace team has tested it against data on the Lower Manhattan economy since 1996. A chart of the index shows a relatively stable upward trend, with economic activity peaking in January 2001. The downward slide reached a low point in July and August 2003, after which the index started to rise.

Stable benchmark. “The turnaround is impressive,” said Farrokh Hormozi, professor of economics and political science at Pace and a PDI co-investigator. “The economy of Lower Manhattan is now in a growth spurt, as the area attracts financial professionals from three states, New York, Connecticut and New Jersey. In addition, developmental, cultural and tourist-attraction projects initiated by Mayor Bloomberg and implemented by various organizations are taking hold.”

“We postulated that a weighted average of the selected variables would give us a good estimate of the state of the Lower Manhattan economy,” said David Pearlman, senior financial analyst at Pace and a PDI co-investigator. “This meant finding a set of representative variables and a relatively stable period against which we could compare our new index. We felt that 1996 was a good choice to begin with, since it fell a few years past the end of the recession of the early 1990s, and was not yet into the ‘bubble.’”

9/11 outgrowth. The Center for Downtown New York (CDNY) at Pace University was founded to serve the community as an academic, research and civic leadership partner in the effort to revitalize Lower Manhattan. CDNY provides assistance and expertise to the residents and leaders affected by or participating in the downtown Manhattan redesign and rebuilding effort; and provides appropriate public policy recommendations, academic perspectives and research recommendations regarding the events and aftermath of 9/11.

Pace University is a comprehensive, independent university committed to opportunity, teaching and learning, civic involvement and measurable outcomes. It is one of the ten founders of Project Pericles, developing education to instill lifelong participation in democratic processes. Pace has seven campuses, including downtown and midtown New York City, Pleasantville, Briarcliff, White Plains (a graduate center and law school), and a Hudson Valley Center at Stewart International Airport near Newburgh, N.Y. More than 14,000 students are enrolled in undergraduate, graduate and professional degree programs in the Dyson College of Arts and Sciences, Lubin School of Business, School of Computer Science and Information Systems, School of Education, Lienhard School of Nursing and Pace Law School. www.pace.edu

New Study by Pace and Wake Forest Professors Show Bond Mutual Funds Mislead Investors

Bond funds change their holdings before disclosure periods to make themselves look better than they actually are, according to a new study by professors Matthew R. Morey of Pace University in New York and Edward S. O’Neal of Wake Forest University in North Carolina.

FOR IMMEDIATE RELEASE

Contact: Bill Caldwell, Office of Public Information, Pace University, 347-242-9342, wcaldwell@pace.edu

NEW STUDY SHOWS BOND MUTUAL FUNDS MISLEAD INVESTORS
BY ENGAGING IN ‘WINDOW DRESSING’

Pace, Wake Forest researchers
suggest mechanism to help regulators
identify funds committing antifraud violation

New York, NY – March 20, 2004 – Bond funds change their holdings before disclosure periods to make themselves look better than they actually are, according to a new study by professors Matthew R. Morey of Pace University in New York and Edward S. O’Neal of Wake Forest University in North Carolina.

The study shows that bond funds on average hold significantly more government bonds and significantly less investment-grade corporate bonds during the twice-a-year disclosure periods required by the Securities and Exchange Commission than they do during non-disclosure periods, presumably to present a safer portfolio to shareholders.

The researchers also detect a group of bond funds that increase positions in speculative-grade corporate bonds at disclosure, most likely in an attempt to advertise higher yields.

Despite concerns voiced by the SEC about this misleading practice, known as ‘window dressing’, and anecdotal reports of it, not a single case charging it has been brought by the Commission against a U.S. mutual fund, according to the researchers.

The lack of action from regulators, they say, has been due to the significant difficulty in identifying funds that are engaging in such activities. The new study presents an analytic mechanism for identifying funds with return patterns consistent with window dressing behavior, and used the mechanism to reach its conclusions.

The authors are the first to directly address window dressing behavior in bond funds, a group of funds that makes up over a third of all mutual funds in the United States.

Last year, Morey, who teaches at Pace’s Lubin School of Business, made national news when he investigated the mutual fund rating services of Morningstar and Value Line and concluded that the ratings of both systems show little ability to predict winning funds.

O’Neal, who teaches at Wake Forest’s Babcock Graduate School of Management, has produced academic studies on the pricing of different share classes. He has provided analysis and testified as an expert witness in lawsuits against brokerage firms.

The paper is available at

/emplibrary/Window_Dressing.pdf

Pace is a comprehensive, independent university committed to opportunity, teaching and learning, civic involvement and measurable outcomes. It has campuses in New York City, Pleasantville, Briarcliff and White Plains, N.Y., and a Hudson Valley Center at Stewart International Airport in New Windsor, N.Y. More than 14,000 students are enrolled in undergraduate, graduate and professional degree programs in the Dyson College of Arts and Sciences, Lubin School of Business, School of Computer Science and Information Systems, School of Education, Lienhard School of Nursing and Pace Law School. www.pace.edu

World Bank President to Speak at Pace University’s Global Finance Leadership Forum

Global Finance Leadership Forum: “A Conversation with James D. Wolfensohn,” hosted by the Center for Global Finance and the Accounting Department of Pace University’s Lubin School of Business, in conjunction Forbes.com and Gartner.

Contact: Bill Caldwell, Office of Public Information, Pace University, 212-346-1597, wcaldwell@pace.edu

MEDIA ADVISORY

NOTE:
Seating is extremely limited. Members of the media must RSVP to wcaldwell@pace.edu

February 19, 2004

WORLD BANK PRESIDENT JAMES D. WOLFENSOHN TO SPEAK AT PACE UNIVERSITY’S GLOBAL FINANCE LEADERSHIP FORUM, FEBRUARY 23

WHAT: Global Finance Leadership Forum: “A Conversation with James D. Wolfensohn,” hosted by the Center for Global Finance and the Accounting Department of Pace University’s Lubin School of Business, in conjunction Forbes.com and Gartner.

This is the third event of its kind organized by the Lubin School’s Center for Global Finance. Past forums have featured Congressman Michael Oxley (R-Ohio); Robert D. Hormats, vice chairman of Goldman Sachs International; John Lipsky, chief economist of J.P. Morgan Chase & Co.; and Paul Volcker, former chairman of the Federal Reserve Board.

WHO: Paul Maidment, executive editor of Forbes and editor of Forbes.com, will interview James D. Wolfensohn, president of The World Bank. Wolfensohn has made sustainable poverty reduction the World Bank Group’s overarching mission.

Before becoming the Bank’s ninth president on June 1, 1995, Wolfensohn established his career as an international investment banker with a parallel involvement in development issues and the global environment. On September 27, 1999, he became the third president in Bank history to be reappointed by the Bank’s Board of Executive Directors to a second, five-year term.

In a speech to the 2003 World Bank/IMF Annual Meeting in Dubai, Wolfensohn highlighted the growing gap between “the haves and have-nots” between and within countries. He called for “a new global balance” with donor and developing nations both taking urgent steps to ensure the United Nations Millennium Development Goals (MDGs) are met.

Under Wolfensohn’s leadership, the World Bank Group has redoubled its efforts to monitor and combat corruption, give voice to clients living in poor communities, and magnify the return on development investments, including sponsoring a global dialogue on Scaling Up Poverty Reduction, which will culminate in a conference in Shanghai in May 2004.

In 1999, Wolfensohn introduced the Comprehensive Development Framework (CDF), emphasizing country ownership of poverty reduction strategies and strong partnerships among government, civil society, and the private sector. Today more than 50 low-income countries and numerous middle-income countries apply this approach.

In 1996, the World Bank and International Monetary Fund launched the Heavily Indebted Poor Countries Initiative (HIPC), the first comprehensive debt reduction program. As of January 2004, 27 of the world’s poorest countries were benefiting from what will amount, over time, to about $52 billion in lower debt service payments.

Wolfensohn has made HIV/AIDS a priority and helped forge strategic partnerships around culture and peace, faith and development, and communications technology, including the Global Distance Learning Network and the Development Gateway.

In his 8 1/2 years as president, Wolfensohn has traveled to 140 countries to better understand the challenges facing the Bank’s 184 member countries. In addition to visiting development projects, he has met with the Bank’s government clients and representatives from business, labor, media, non-governmental organizations, religious and women’s groups, students, and teachers.

He holds a BA and LLB from the University of Sydney and an MBA from the Harvard Graduate School of Business.

WHEN: Monday, February 23. Continental breakfast at 8 a.m. Discussion from 8:20 to 9:30 a.m.

WHERE: Forbes Building, 60 Fifth Avenue (between 12th and 13th Streets), New York City.