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SEC Accused of Neglecting Implementation of the JOBS Act
On Thursday, Republican members of the U.S. House of Representatives criticized the SEC for failing to meet deadlines mandated by Congress to complete portions of the JOBS Act designed to help small business funding.
While the JOBS Act had been signed among much fanfare touting much needed capacity building of small businesses in the U.S., in reality, only portions of it found implementation. Key provisions like lifting a ban on general advertising for private placement offering or establishing new regulatory regimes for crowdfunding required rewriting by the SEC.
However, since the SEC is busy with trying to control the depredations of big businesses, it keeps dragging its feet over issues of the JOBS Act that concern the growth of small businesses.
On Thursday, Lona Nallengara, the acting director of the SEC’s Division of Corporation Finance was taken to task by Michigan Representative Kerry Bentivolio.
Bentivolio told the SEC official, “The SEC expects reporting companies as their regulator to respect their deadlines. Congress is your regulator. Is it fair for us to expect you to respect our deadlines?”
Internal e-mails of former SEC Chairman Mary Schapiro obtained by a U.S. House panel revealed that she had delayed implementation of the crowdfunding rule designed to help small businesses raise capital due to personal concerns that she might be targeted as a pro-investor leader in the agency.
Though Mary Jo White, the new chairman of SEC has said that the rulemaking for JOBS Act remains one of her top priorities, she has not delivered any schedule or timeline.
And Bentivolio vented, “No date. No real deadline. Just when you get around to it. I’m getting a lot of verbal moonwalking, but I’m not getting anywhere.”
Nallengara, the SEC official before the hearing tried to convince House representatives that the SEC staff is working “as if their rulemaking is the first one to go,” but few were convinced.
Representative Blaine Luetkemeyer told the SEC official, “I don’t think you see the importance of your job.”
The 2012 Jumpstart Our Business Startups Act remains unable to help small businesses in the country, for now, as no one in the SEC seems keen enough to be seen as pro-investor. And without rules being completed, the JOBS Act remains impotent.