A new bill that would relax the Security and Exchange Commission (SEC) regulation on small and upcoming businesses seemed like a shoe-in last week, but it is facing some major opposition from democratic opponents who warn it could lead to another Enron-like scandal. The bill is closely tied with other regulatory functions that some in the House hope to reform or eliminate.
Despite support from President Barack Obama the bill is in great danger of not being passed. The House is willing to hear any words about legislation that will create job growth, but it is rightfully suspicious of solutions that might create more problems than they solve.
SEC Chairman Mary Shapiro presented to Senate Banking Committee leaders this week to voice her concern for the bill:
"...it would eliminate important protections for investors in even very large companies, including those with up to $1 billion in annual revenue,"
"[The bill] needs additional safeguards to protect investors from those who may seek to engage in fraudulent activities."
Senator Dick Durbin of Illinois, added to the sentiments of the SEC:
"Let's call this crowdfunding for what it is. It is Internet gambling, and the odds will never favor the investor."
"[This] so-called jobs bill creates a job opportunity for any individual salesman to set up shop with a barstool and a laptop computer."
"They can be selling worthless stock for phantom companies,"
Apparently President Obama is committed to working with Senate Democrats to improve the bill so that it meets the demands of their platform. He wants to find a common ground that can satisfy all the parties and get it passed quickly in order to bring support to small business and spur jobs growth for American workers.
Much of the success of the bill depends on the self-financed US import/export bank that helps American small business by providing credit to foreign investors. Unfortunately the bank has long been a target of conservative group and It is slated to expire at the end of May unless action is taken to prolong its existence.
We'll keep readers updated on the progress of the bill and what's being changed as it makes its way through the House. Hopefully they'll reach a compromise soon.