When Congress in a rare bipartisan stampede rushed to pass the JOBS Act earlier this year, it enacted modest reforms to make it easier for startup businesses to raise capital. But it also saddled the U.S. Securities and Exchange Commission with more rulemaking work at a time when the agency is already overwhelmed.
That was the consensus of panelists today at the American Bar Association’s Administrative Law and Regulatory Practice Fall Conference in Washington. “The JOBS Act has some good things, some less than laudatory,” said former SEC Chairman Harvey Pitt. “We can’t pick the winners and losers yet, except the commission is a clear loser.”
The Jumpstart Our Business Startups Act, which was signed into law by President Obama in April, was intended to facilitate initial public offerings, relaxing certain standards for accounting and disclosures, as well as making it easier for companies to remain private longer and allowing them to advertise private offerings. Also, the act created a new exemption for “crowdfunding” – raising small amounts of money via websites like Kickstart.
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