Obama Signs "Fraud-Friendly" JOBS Act into Law

Published on
by
Common Dreams

Obama Signs "Fraud-Friendly" JOBS Act into Law

Economist: Bill will bring fraud, destroy jobs

by
Common Dreams staff

President Obama has signed today the "fraud-friendly" JOBS (Jumpstart Our Business Startups) Act, which one leading economist has referred to as an "anti-jobs act" that will lead to more fraud. 

Commenting on the “Jumpstart Our Business Startups” Act, economics and law professor William Black wrote in an open letter signed by other analysts: "The JOBS Act is something only a financial scavenger could love. It will create a fraud-friendly and fraud-enhancing environment. It will add to the unprecedented level of financial fraud by our most elite CEOS that has devastated the U.S. and European economies and cost over 20 million people their jobs. "

Speaking on Up with Chris Hayes this past Sunday, Black added that "this is an anti-jobs bill." Reiterating that the act would create fraud, he said, "When you encourage fraud... you destroy jobs, you destroy millions of jobs."

SEC Commissioner Luis Aguilar also noted in a March 16 speech: "The bill would benefit Wall Street, at the expense of Main Street, by overriding protections that currently require a separation between research analysts and investment bankers who work in the same firm."

Barbara Roper, director of investor protection at the Consumer Federation of America, also sees fraud increasing the passing of the bill. "This legislation will unleash a new wave of damaging investment fraud, undermine market transparency, and increase the cost of capital for the small companies it purports to benefit. Unfortunately, both the administration and a bipartisan majority in Congress have chosen to ignore those warnings."

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The JOBS Act is so Criminogenic that it Guarantees Full-Time Jobs for Criminologists

The “Jumpstart Our Business Startups” Act, the comically forced effort to create a catchy acronym, is the most cynical bill to emerge from a cynical Congress and Administration. It is an exemplar of why Congressional approval ratings are well below those of used car dealers. The JOBS Act is something only a financial scavenger could love. It will create a fraud-friendly and fraud-enhancing environment. It will add to the unprecedented level of financial fraud by our most elite CEOS that has devastated the U.S. and European economies and cost over 20 million people their jobs. Financial fraud is a prime jobs killer.

Powerful regulatory regimes – strong accounting rules, strict corporate governance, tough securities laws, and vigorous civil and criminal enforcement of the regulations and laws is the greatest infrastructure for strong economic growth that a nation can provide. [...]

Among the many fraud-friendly policies that led to the deregulation that prompts our recurrent, intensifying financial crises, the undisputed most destructive aspect is the recurrent, intensifying embrace of the “regulatory race to the bottom.” The “logic” of the argument in the securities law context is that (1) dishonest issuers like bad regulation because it allows them to defraud with impunity, (2) our “competitor” nations (typically described as the City of London) offer weaker regulation to induce the fraudulent issuers to locate abroad, and (3) we must not allow this to happen; we must make sure that fraudulent issuers are based in America. Of course, they never phrase honestly their “logic” about dishonesty. Four national commissions investigated the causes of financial crises – the S&L debacle, the ongoing U.S. crisis, the Irish crisis, and the Icelandic crisis. Each of the commissions has decried the idiocy of the “race to the bottom” dynamic and warned that it must end. The arguments advanced by industry in support of the JOBS Act reflect and worship at the altar of “the race to the bottom.”

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The Huffington Post: Obama JOBS Act Leaves Labor Fuming In Democratic Feud

[T]he White House and congressional Republicans tout the JOBS Act as a shot in the arm for small companies that have bright prospects. Fast-growing start-ups are engines of job growth and the bill is intended to make it easier for these companies to raise capital.

In practice, however, the bill will be a greater boon for venture capitalists, large tech companies and Wall Street banks. This cadre quickly got the president’s backing for the JOBS Act, despite vocal opposition from consumer advocates, federal regulators and the largest U.S. coalition of labor unions, who warned of increased risk of financial fraud. [...]

"The bill would benefit Wall Street, at the expense of Main Street, by overriding protections that currently require a separation between research analysts and investment bankers who work in the same firm," SEC Commissioner Luis Aguilar said in a March 16 speech.

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The Real News: Jobs Act 2012 a Recipe for Fraud
Bill Black: The "Jumpstart Our Business Startups Act" will create a race to the regulatory
bottom


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