Matt Taibbi sat down with Current TV's Eliot Spitzer to discuss the bipartisan debacle just passed by the Congress and signed by President Obama last week called the JOBS Act and the potential political fallout if this is made into an issue in the upcoming presidential campaign.
Our own Jon Perr has been writing about what a terrible bill this was from the time it was introduced, when Eric Cantor was first pushing it on Fox News. Sadly, as Taibbi and Spitzer pointed out in the segment above, the law is going to effectively repeal about half of the meaningful rules that were put in place to prevent another bubble and all this did was take away what competitive advantage the stock market had in the United States because investors felt they could trust they were being told the truth about the companies they were investing in and their accounting methods.
Matt has more in his recent article at Rolling Stone here -- Why Obama's JOBS Act Couldn't Suck Worse:
Boy, do I feel like an idiot. I've been out there on radio and TV in the last few months saying that I thought there was a chance Barack Obama was listening to the popular anger against Wall Street that drove the Occupy movement, that decisions like putting a for-real law enforcement guy like New York AG Eric Schneiderman in charge of a mortgage fraud task force meant he was at least willing to pay lip service to public outrage against the banks.
Then the JOBS Act happened.
The "Jumpstart Our Business Startups Act" (in addition to everything else, the Act has an annoying, redundant title) will very nearly legalize fraud in the stock market.
In fact, one could say this law is not just a sweeping piece of deregulation that will have an increase in securities fraud as an accidental, ancillary consequence. No, this law actually appears to have been specifically written to encourage fraud in the stock markets.
Ostensibly, the law makes it easier for startup companies (particularly tech companies, whose lobbyists were a driving force behind its passage) attract capital by, among other things, exempting them from independent accounting requirements for up to five years after they first begin selling shares in the stock market.
The law also rolls back rules designed to prevent bank analysts from talking up a stock just to win business, a practice that was so pervasive in the tech-boom years as to be almost industry standard.
Even worse, the JOBS Act, incredibly, will allow executives to give "pre-prospectus" presentations to investors using PowerPoint and other tools in which they will not be held liable for misrepresentations. These firms will still be obligated to submit prospectuses before their IPOs, and they'll still be held liable for what's in those. But it'll be up to the investor to check and make sure that the prospectus matches the "pre-presentation."
The JOBS Act also loosens a whole range of other reporting requirements, and expands stock investment beyond "accredited investors," giving official sanction to the internet-based fundraising activity known as "crowdfunding." Read on...