March 13, 2012

The JOBS Act: Congress Being Congress

Yesterday, Dave did a great job in describing the JOBS Act and how it would fast-track capital formation reform (we are posting memos on the Jumpstart Our Business Startups Act in our “IPOs” Practice Area). Dave also noted that the Senate was fast tracking the bill – and that some were questioning the measures in the bill.

As I’ve blogged before, count me among those that think this is a wrongheaded thing that Congress is doing in the capital formation area. This bill has nothing to do with jobs and everything to do with fewer protections for investors. I am not the only one who feels that way as noted in these articles (note that last one that argues that the bill won’t even be good for IPOs!):

They Have Very Short Memories – NY Times
Imaginary Problems – Motley Fool
Extraordinary Popular Delusions and the Madness of Crowd (Funding) – Huffington Post
Financial regulations gutted in new bill – San Francisco Chronicle
Job-Creation Legislation Seen Eviscerating Shareholder Protections in U.S. – Bloomberg
Alone in a Crowd: How Crowdfunding Could Strand Startups – Bloomberg BusinessWeek
JOBS Act enables Chinese fraud – China Accounting Blog
Sarbanes, Edwards say jobs bill hurts transparency – Baltimore Sun
The JOBS Act and the IPO Off Ramp: Discouraging IPOs – Race to the Bottom Blog

And here are a bunch of letters from organizations arguing against the new legislation:

Group of organizations, including Consumers Federation and AFL-CIO
Americans for Financial Reform
Council for Institutional Investors
North American Securities Administrators Association (NASAA)

Yesterday, the SEC posted two sets of recommendations from its Advisory Committee on Small and Emerging Companies – one for reporting obligations and one for market access. And last week, Facebook filed its Pre-Effective Amendment No. 2 to its Form S-1

US Investors as an “Easy Mark”: More Evidence

As noted in this blog, it’s now pretty well known how scores of Chinese companies – that turned out to be fraudulent – listed their securities here in the US because they weren’t able to do so in China. As noted in this article from “The Telegraph,” the London Stock Exchange is exploring ambitious plans to push its junior AIM market into the United States. To be honest, I thought AIM was dead since so many of the companies that have gone public and listed there have since gone down the tubes. As noted in the article: “In 2007, Roel Campos, a commissioner at the Securities and Exchange Commission voiced his concerns that 30% of new firms listing on AIM “are gone in a year.”

Transcript: “Company Buybacks: Best Practices”

We have posted the transcript for our recent webcast: “Company Buybacks: Best Practices.”

– Broc Romanek