Representative Maxine Waters, the ranking minority member on the House Financial Services Committee, has issued a blistering statement on the Expanding Access to Capital Act (HR 2799), renaming it the Expanding Access to Fraud Act.
Introduced into the House by Representative Patrick McHenry, Chairman of the House Financial Services Committee, McHenry recently explained what the legislation aims to accomplish:
“This bill is designed to address three key facets of our capital markets. It will strengthen our public markets, help small businesses and entrepreneurs, and create new opportunities for everyday investors to build wealth through our private markets. First, our public markets. This bill aims to reverse the dangerous decline in initial public offerings, or IPOs, in the United States.”
McHenry added that the bill builds upon the success of the bipartisan JOBS Act, which legalized crowdfunding and was signed into law during the Obama Administration.
Waters claims the bill threatens to undermine that investor confidence. She criticized the legislation as making it easier for companies to “offer securities without needing to register with the SEC or provide critical disclosures to ordinary investors.” Waters predicted that “bottom-of-the-barrel private securities that will be sold to retail investors.” This alludes to a portion of the bill that expands the definition of an accredited investor to enable more individuals to participate in certain private securities offerings. Some observers believe the current definition is discriminatory as it currently allows access only for the wealthy, thus excluding much of the population.
She urged Democrats to reject the bill.
Yesterday, the legislation was opened up for debate on the House floor but closed the day as “unfinished business” without a House vote.