JOBS Act: Legalizing Fraud in the Stock Market?
Remember Yogi's favorite line? Deja vu all over again. Well, guess, what, after all of that fraud occurring on Wall Street just a few years ago (and I thought I was suffering from short-term memory loss!), it's deja vu all over again! Congress and the President just approved another loosening of Wall Street regulations, the JOBS Act, once again legalizing fraud in the stock market. Didn't they learn anything from the economic devastation resulting from the repeal of Glass-Steagall other than that crime does indeed pay well?
Former SEC Chief Accountant Lynn E. Turner shared the following views on the JOBS Act: the Jumpstart Our Business Startups Act:
"...this bill will loosen IPO regulations for almost all IPO's and for up to five years thereafter for those companies. It legalizes and allows research analysts to again engage in activities that were prohibited as a result of the dot com and wall street scandals and prohibits the SEC from taking action when they do so. It impedes the ability of the FASB and PCAOB to issue new standards. And it once again opens up even more broadly the general solicitation of the public, including the elderly wealthy such as those who invested in Madoff and Stanford Ponzi schemes.”
“This is a great example for students in the class room as to how sausage and legislation is made in Washington DC., especially when it benefits special interests groups."
Haven't we learned by now that the loosening of investment protections would expose small and inexperienced investors to fraud. Does anyone actually believe that the way to create jobs is to weaken regulatory protections?
Various criticisms of the JOBS Act include: "Gutting regulations designed to safeguard investors"; "legalizing boiler room operations"; relieving "businesses that are preparing to go public from some of the most important auditing regulations that Congress passed after the Enron debacle"; and "a terrible package of bills that would undo essential investor protections, reduce market transparency and distort the efficient allocation of capital".
For more critical scrutiny of the JOBS Act, please see: JOBS Act: Jumpstart Our Business Startups Act. Legalizing Fraud in the Stock Market.