February 7, 2013
As a corporate and securities lawyer since 1987, I have watched in dismay as federal regulation and legislation have strangled the flow of capital to small and start up concerns. Last year, for the first time in my 24 years of practice, I had U.S. based small corporate clients go abroad for capital and to go public. The SEC has a concern about "microcap" fraud. Having read the SEC News Digest for decades, I see no drop in microcap fraud cases despite numerous SEC initiatives and I hear from peers, who represent larger companies and operate in Wall Street, and from press coverage that the SEC continues to be fackless in regulating large investment bankers and politically connected firms like Madow. Bureaucrats do not understand how difficult it is to start, run and maintain a business - to meet payroll every two weeks. There are no taxpayers ensuring regular paychecks and step pay raises. Small and start-up companies in the U.S. desperately need access to capital. The JOBS Act tries to reach a more sane regulatory system by allowing people to invest limited amounts in start-up and small business concerns with the understanding that the investments are at risk and they are not protected by Nanny regulators. That is a practical and fair system - people are willing to accept the risk of a small investments in companies that may or may not survive. They accept the risk in hopes of a home run investment. Investors should have that freedom.
I urge the SEC to stop its delaying tactics and implement the necessary rules for the JOBS Act.