This is what we get in the way of “reform” these days. Changes masquerading as reform, but that really change nothing. An example from The National Memo below:
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Ex-Con Man Says JOBS Law Makes Guys Like Him Rich
April 5th, 2012 1:51 pm Susan Antilla
April 4 (Bloomberg) — Mark L. Morze knows a good investment opportunity when he sees one, but he hasn’t pursued his fortunes quite the way the rest of us have. Morze, 61, hung his hat for 4 1/2 years at federal prisons in Lompoc and Boron, California, after pleading guilty to two counts of fraud for cooking the books at the infamous carpet-cleaning company ZZZZ Best in the 1980s.
He says he’s baffled that President Barack Obama plans to sign a law tomorrow that amounts to an open invitation for fraud. “I wish legislators would consult with people like me before they write something like this,” he says, sounding dead serious about the offer. “I could tell them, ‘I know what your intent was with this wording, but we can get around it so easily, it cracks me up.”’
I’m sure the last thing U.S. lawmakers were looking for in their zealous bipartisan push for the Jumpstart Our Business Startups (JOBS) Act was the inconvenient feedback of a seasoned investment fraudster — albeit one who says he’s rehabilitated and now lectures on the techniques scammers use. Though the JOBS Act was packaged as a plan to streamline rules to help small companies crank out jobs, even its cheerleaders have come up with scant evidence the law will boost employment much, if at all. In an election year when pragmatic politicians are laboring to come off as allies of deep-pocketed business donors, the JOBS Act is a slapdash attempt at securities-law deregulation, plain and simple.
The new law has 22 pages of gems that include new ways for securities analysts to tout their firms’ public offerings, and cool opportunities to avoid rules that force companies to supply audited financial statements. In the end, though, the law that Morze tags as having “real potential for abuse” boils down to two features that don’t bode well for small investors: It lets a lot of companies reveal less about themselves when they sell stock, and, for the first time, it lets companies flog their shares on the Internet.
The Securities and Exchange Commission still has to figure out how the new JOBS rules will read, which just means the unsightly lobbying to diminish investor protection hasn’t yet ended.
There is a lot to dislike about the law, and we will all learn soon enough which ill-advised provisions in the JOBS Act have done the most harm to smaller investors. For the moment, though, the law’s approval of something called “crowdfunding” looks like the most toxic of all.
I wrote about crowdfunding this time last year, having noticed that celebrity Whoopi Goldberg had promoted the idea on her Facebook page, where she continued to plug crowdfunding as recently as last month. Crowdfunding is a way to raise money, as tech types put it, “from the crowd” on the Internet. It became popular when musicians and other artists began using it to solicit online donations for underwriting music tours and films.