Playing Footsie with the FTSE 100

Britain’s FTSE 100 (like the S&P 500) is a measure of blue-chip respectability signaling good governance, and so on. Now, some businessmen have figured out how to break into this index without a solid record. First, they buy a firm that’s already public, then they convert shares in their shady firm into shares of the recently bought firm. Note the unintended consequences. Rather than living within the rules, people try to game them.