A spat between the London Stock Exchange (LSE) and the US Securities and Exchange Commission (SEC) loomed yesterday after an SEC commissioner, Roel Campos, described London's junior Aim market as a casino and claimed 30 per cent of its new listings were "gone within a year". "That feels like a casino to me, and I believe that investors will treat it as such," he said.

Mr Campos added that the LSE risks reputational damage through its operation of Aim.

The LSE hit back, declaring Mr Campos's reported failure rate an exaggeration by a factor of about 10 and hinted that jealousy over Aim's success in attracting US listings lay behind his comments.

"Since the beginning of last year, the number of US com-panies on Aim has almost doubled to 60," the LSE said. "It is therefore surprising that Mr Campos should make comments that are so entirely wrong. They do a disservice to the quality small companies choosing to join Aim, the institutions choosing to invest in those companies and the high regulatory standards that the LSE promotes."

US stock exchange operators, as well as regulators and politicians, have expressed concern in recent months about the growing popularity of London as a venue for internationally-listed com-panies as opposed to New York.

Many have blamed the US Sarbanes-Oxley Act that set tough reporting standards in the aftermath of the Enron and WorldCom accounting scandals.

Christopher Cox, SEC chairman, declined to comment on Mr Campos's remarks. However, they are likely to embarrass Mr Cox, who has made repeated calls for cross-border regulatory harmonisation in recent months.