JOBS Act: Why are Democrats suddenly raising red flags?
No one wants to vote against jobs, but a wide swath of critics – ranging from the SEC, the AFL-CIO, and pension funds – worry that features in the proposed JOBS Act could hurt investors.
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While many organizations, including AFL-CIO and the Council of Institutional Investors – the nation’s largest labor union and its largest group of pension plans – lodged concerns about the legislation, Levin said that the letter from the SEC “was perhaps the most powerful of all.”
Among other concerns, Ms. Schapiro’s letter says that the JOBS Act would:
• Undo regulations instituted after the dot-com crash that separate stock research analysts from bankers underwriting an initial public offering (IPO), a division meant to keep analytical advice given to investors untainted.
• Unnecessarily loosen auditing restrictions for some small companies heading toward IPOs.
• Fail to provide adequate consumer safeguards for crowdfunding.
“We all should have learned from the painful recent past that reducing investor protections against fraud and abuse will not build a strong economy and create jobs – quite the opposite,” Levin said on a conference call with reporters.
Tucked at the end of Democrats' amendment to the bill, however, are two items with nothing to do with investor protections – but that have heavy Democratic support.
First, Democratic senators seek an expansion of credit for the Export-Import Bank, which helps finance the sale of US goods abroad where credit is unreliable or unavailable. In addition, they’re seeking a $1 billion expansion of a venture capital program administered by the Small Business Administration.
Senate Republicans, who had been publicly urging the rapid adoption of the bill from nearly the moment it moved between ends of the Capitol, scorched Democrats for standing in the way of bipartisan legislation.
“They want to pick a fight rather than get this bill to the president’s desk,” Senator McConnell said in a speech on the Senate floor Thursday. “If you’re looking for the reason this Congress has a 9 percent approval rating, this is it.”
Democrats, of course, see things differently.
“Instead of trying to scuttle the bill, we’re trying to make sure that investors are on board,” Senator Reed said in a conference call with reporters. “In some place other than steerage.”
If amendments are added to the House bill, the two chambers would have to reconcile their differences in a conference committee before the bill could become law.
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