Looser corporate-governance standards are luring foreign companies to U.S. markets, a development causing concern among some large investors.
Overseas companies like Chinese e-commerce giant Alibaba Group Holding Ltd. have recently opted to list their shares in New York rather than in their home markets or on other international exchanges, in part because the U.S. in some respects is more lenient, people familiar with the matter say.
Unlike venues in London and Hong Kong, their main rivals in the race for global listings, the New York Stock Exchange and the Nasdaq Stock Market allow corporate insiders who collectively own less than half their companies' stock to exercise control through dual-share structures and other means. In addition, many foreign companies are exempted from some of the disclosure requirements imposed on U.S. corporations.
"If you're looking to do dual-class, the U.S. is where you can do that," said Alex Cohen, a former Securities and Exchange Commission official w
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