Will the JOBS Act help investments?
Mary Kissel discusses the need for businesses to have access to capital
- Duration 8:35
- Date Mar 23, 2012
Mary Kissel discusses the need for businesses to have access to capital
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Is this month from a -- yes there was -- about how all next week they're going to be talking about a you know of repealing obamacare.
We hear Dick Durbin the other day wants -- -- -- I'd say you know the courts now figure out what they're doing.
And you here we are senate passes the job.
What what I'm on the way to the back what I understand any of this stuff that's when Mary.
Castles here wall street journal editorial board I'm glad you're here my first question is I don't know -- bees they find the time to come up with this.
-- personal that the senate didn't come up with a -- here.
About adding Diet Coke house financial services chairman Spencer Bachus one and priorities that he had coming in office.
Particularly for the committee was capital formation.
That sounds like lingo what does that mean it means that we need to help.
Reduce red tape and get companies that capital looking need to invest -- to grow.
So there were a number of bills that the house passed it was a perfect example bipartisanship.
Right if you can believe that.
And -- really be that the core idea here is to just exempt small companies.
From this bone crushing business crushing.
Dodd-Frank in sarbanes Oxley regulations that everybody knows he's doesn't work in and prevents these companies.
From either raising capital or even going public.
So the house passes this great bipartisan.
Package of bills together the White House comes out this is great and then what happens he gets up to this and that.
Late last week and SEC chairman Mary Schapiro says -- I don't like this because.
The SEC you're taking power away from us and then also -- the AFL CIO doesn't like it and then you have Dick -- on the floor invoking Enron but you know what.
Guess what happened yesterday.
Be -- the democrats' attempts in the senate to block this failed on the floor -- so they were able to take what's called -- clean vote on the jobs access the acronym for this for this.
Collection of of initiatives.
And the president is likely decided that's the back of the house first they'll pass -- next week the president is likely assignment.
I soon after so it's it's a great achievement that.
It's arguably one of the better things we've seen come out of this administration its huge 88 in -- -- the other teams to get a flattening as the bill does.
It creates a new kind of company called emerging growth company less than a billion dollars it's going to exempt them from SEC registration.
They're gonna raise the number of shareholders private companies can have from this arbitrary 500 to 2000 so that's a lot.
They're gonna want to advertise for investors which which companies are very limited in doing today.
On -- -- a lot of protections here firm investors it's not as if they're gonna go out to mom and pop.
retiree and say.
Please take a flyer on my new Internet business is invest your entire life saving you -- do that that -- -- bill doesn't allow that.
We we need this it's a recognition from both Republicans and Democrats that.
There's something wrong if it takes nine years from the time -- funded.
With venture capital.
To going public there's also recognition that credit is very tight these days and come easy access to capital and thirdly.
We live -- working -- globally competitive environment.
And if companies aren't able to raise the money if they need today.
And to go public you know what they're gonna go elsewhere -- -- Republican Hong Kong or Singapore or London or or elsewhere.
So this is a good first step.
-- -- important steps and you know this -- basically create a laboratory it's an experiment.
Do we really need the SEC.
Getting in front of every single offering.
To quote unquote protect investors.
Or if you give investors information particularly these very sophisticated investors that are gonna be allowed to invest in these private companies.
Can they make those decisions themselves.
Yes is he arguably.
Is is part of the problem it's a huge part of the problem.
Many will argue though and -- -- -- one of the things like the most about it is the ability to increase the private shareholders.
I mean right I think it was FaceBook that hit that -- 99 and they were like.
We can't make a decision what are we gonna do it right.
But -- -- to think about the broader implications of companies not going public what does that mean for you -- in the one that doesn't happen.
Do you and I can't get access to the fastest growing.
The -- granted.
Risky but also basically the highest potential return companies.
I'm out there so -- FaceBook waited a long time to go public -- you know who profited when -- but didn't.
Go public a very small group and investors if FaceBook had been able to go public much earlier are you believe there would have been.
Thousands of people who would've made a lot of money off off of FaceBook because FaceBook.
-- high growth period -- longer in the public space rather than but again right it's exactly the SEC.
Look you see this is just -- a classical -- that Mary Schapiro.
The agency that mister Madoff did miss Allen stand for this agency is so.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- This number of investors we know what.
And on the books for decades didn't studying this issue for years this effectively congress and Democrats in congress.
-- -- SEC this is ridiculous guys this is hurting our capital markets we have to do something.
-- who is Smart one here.
Is this still some way too Smart for congress again that I ask you gotta give a lot of credit to -- too good to be anonymous staffers in the house.
Both on the Republican side in terms that house financial services committee.
Who were going to places like Barney Frank's office in talking to Barney Frank staff and saying.
What can we do we all know there's a problem -- we fix it.
And so you know what Barney Frank got behind it.
-- so did the entire GOP caucus so did many democratic senators.
It in but I tell you what.
This this push back they almost kill this thing this week was really instructive because what it says is there are powerful constituencies in Washington.
Who say that they're protecting investors.
Or -- -- -- standing up for unions and actually they're not what they're standing up for is their own lobbying -- In their -- status quo.
That they make -- office.
We asked about Starbucks sarbanes Oxley.
Many many many think it is just a big.
Burden and if financial drain on most companies that there isn't -- Sweeney isn't there that we hunts another and a we we have -- sort of gotten people.
To be little more responsible.
-- -- case to be made up.
I don't know why I guess you could try to make that hypothetical argument but how do you know I don't know let me you know -- my question nation we just.
Get rid of Starbucks sold together well yeah of course yes -- -- -- the only constituency today arguably for Starbucks are the big four accounting firms.
-- benefit from the mandatory audit firm rotation.
And they benefit from something called an -- of internal controls right which is effectively -- duplication of what companies already do.
Remember quarters of -- burden of Starbucks it's small companies.
They don't have a big compliance department in place and how it where that's a bigger burden on them to pay for these very good -- -- -- measures that Starbucks needles look.
The FCC is never gonna catch every frauds sure.
Period they are out there it's going to happen.
But remember the SEC also not only is a mandate to protect investors.
Also has a mandate to promote capital formation.
And that's what this bill is trying to promote and -- the SEC.
Criticizing this should be cheerleading it and they are not and that says something about the big regulatory state in Washington.
-- -- -- But she's again.
You're awesome and you know you're not wrong because they're hold in this country back beneath the SEC that should be abolished but.
-- -- Thank you so -- general enjoyable that is good stuff good together some of other jobs -- read it there's a lot of stuff online -- journal did a ton of stuff funny to.
And it's bipartisan who ever thought.