Reuters: Regulatory News: Investor advocates to meet with Treasury on JOBS Act concerns

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Investor advocates to meet with Treasury on JOBS Act concerns Jul 31st 2012, 22:00 Tue Jul 31, 2012 6:00pm EDT * Treasury to hold closed-door roundtable on JOBS Act law * Advocates to express concerns about investor protections * SEC may consider adopting general advertising ban right away * Advocates expected to warn against immediate lifting of ban By Sarah N. Lynch WASHINGTON, July 31 (Reuters) - Advocates for investors will meet with U.S. Treasury Department officials and others on Wednesday to express concerns about a new law that makes it easier for smaller companies to raise capital, people familiar with the matter said. The Jumpstart Our Business Startups law, or JOBS Act, won overwhelming bipartisan support from Congress in March. But critics of the legislation have said it goes too far in scaling back important protections for investors. Wednesday's closed-door roundtable at Treasury is expected to include senior Treasury and National Economic Council officials, as well as representatives from the Securities and Exchange Commission and the Financial Industry Regulatory Authority, according to one person familiar with the lineup. Other expected attendees include the AFL-CIO, several law professors, the AARP, Americans for Financial Reform, and state securities regulators, among others, the person said. The new law reduces certain regulatory requirements for companies with less than $1 billion in revenue seeking to go public, raises the number of shareholders that trigger public financial reporting and lifts a long-time ban on advertising for private offerings. Before the bill's passage, SEC Chairman Mary Schapiro and SEC Commissioner Luis Aguilar both called for major changes to the legislation, most of which were not adopted before President Obama signed the measure into law. A majority of bankers also agreed in a recent survey that the law could open the floodgates for accounting problems. Earlier this week, as the Sarbanes-Oxley law celebrated its 10-year anniversary, former Senator Paul Sarbanes said the JOBS Act's lax regulatory scheme for IPOs below $1 billion in revenue is a "scandal waiting to happen." INTERIM RULE? The SEC has been working to juggle the implementation of new JOBS Act provisions along with its still massive workload from the 2010 Dodd-Frank Wall Street reform law. Some of the JOBS Act provisions went into effect right away, but others still require rulemaking. On Aug. 22, the SEC is slated to vote on one key JOBS Act rule that lifts a ban on general solicitation for private securities offerings. Because the SEC has already missed a 90-day deadline in the law to implement the rule, the SEC is considering adopting an interim rule that would lift the advertising ban right away, one person familiar with the SEC's thinking said. The SEC would then solicit comments after the rule was in effect and make changes later, if needed. The SEC has implemented new rules before seeking comment in the past. But in most cases, the SEC first requests public comments before putting a new rule on the books. Going that route is likely to generate concern from critics who have said that lifting the advertising ban without studying the rule first may unduly harm investors. In a May letter to the agency, the AFL-CIO, the Consumer Federation of America and other investor advocates urged the SEC not to simply lift the ban without first making "substantial additional amendments" to make sure investors are adequately protected. The SEC's plans to adopt an interim rule is expected to be discussed at the Treasury Department meeting on Wednesday, sources said. Link this Share this Digg this Email Reprints

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