JOBS Act Hearing and Meeting

Mary Schapiro, Chair, SEC and Darryl Issa (R-CA)
Chairman, Committee on Oversight
and Government Reform,
at JOBS Act Hearing, June 26, 2012.
Photo by William Michael Cunningham

As C-SPAN noted, "The JOBS Act (Jumpstart Our Business Startups Act), designed to help small companies raise investment capital, was signed into law by President Obama on April 5, 2012.

On June 26th, the TARP Subcommittee of the House Oversight held a hearing on the Security and Exchange Commission's (SEC) efforts to implement the Act. The SEC had 270 days from the signing of the Act to set forth rules. Rep. Patrick McHenry (R-NC) chaired the hearing. The JOBS Act relaxes some of the regulations put in place by the Sarbanes-Oxley Act and establishes the creation of Internet funding portals to facilitate 'crowd funding,' the collective pooling of money to support business projects. Critics worry that the JOBS Act's relaxed regulations will encourage fraud."

We attended the hearing and found that the SEC will be late in responding to the deadlines established by the law. No mention was made of the recent $2 billion dollar loss at JP Morgan or the LIBOR scandal. Given this, concerns about fraud were misplaced.

This continues a pattern. On August 1, industry representatives FINRA and SIFMA met with the Treasury and the SEC to discuss the Act. No public advocates were present at the meeting, which focused on protecting the financial services industry from competition, not protecting consumers.

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