When we talk about white privilege and systemic racism, one thing that always comes up is generational wealth. It’s a thing white people disproportionately benefit from and a thing that is virtually nonexistent for Black people, as history has shown us far more instances of Black wealth being sabotaged (*cough* Black Wall Street *cough*) than instances where it has been nurtured and encouraged. One former lawyer has taken steps toward rectifying this disparity by launching the first Black-owned stock exchange in U.S. history.
In an interview with Black Enterprise, former attorney Joe Cecala discussed The Dream Exchange—a stock exchange he founded in partnership with Cadiz Capital Holding L.L.C., a minority-owned private equity firm. According to the Dream Exchange website, the company focuses “on small business capital formation and diversity using the power of the American investing public.”
“Early in my legal career, I learned how stock exchanges ‘hunt’ for liquidity because I was the lawyer for the founders of Archipelago, one of the first and the biggest electronic stock exchanges in the world,” Cecala told BE. “Archipelago grew into what the world has come to know today as the New York Stock Exchange. Because of my experience in understanding the formation of the world’s greatest electronic stock exchange, I learned how a stock exchange creates and controls liquidity in the markets.”
“After years of research, I discovered that the structure of the US capital markets and the current stock exchanges favor only the largest transactions with celebrity companies, Cercala continued. “My research showed that, prior to Archipelago, the overwhelming majority of IPO’s were $50.0 million and under! By 2004, small capital IPO’s had all but disappeared. After years of working with minority businesses, I realized as well that minority businesses were nearly absent from all IPO and public company listings.”
Cecala hopes that by launching the Dream Exchange he’s creating a space that will allow more people of color (and Black people specifically) to get into investing as well as promote Black and minority-owned businesses to be invested in.
“The importance of a Black-owned stock exchange cannot be understated. Research from the SEC’s IPO task force shows that 92% of all jobs are created after a company goes public,” he said. “In the 230-year history of stock exchanges in America only one Black-owned firm has made it to the New York Stock Exchange and there has never been a Black-owned stock exchange. Without access to public markets, any sector of society absent will most certainly suffer economically. This is the importance of having a channel for access to the public markets in America.”
It’s a step towards bridging the racial wealth gap that we hope will be successful and benefit more Black entrepreneurs and Black-owned businesses in the future. And hopefully, it won’t be the last stock exchanged owned by Black folk. Joe Cecala, we salute you and wish you much success.