Matt Taibbi thinks the JOBS Act signed by President Obama last week is just about the worst thing ever.
To backup, the JOBS act has been called the “crowdfunding act” because it lifts various regulations on startups raising money, and how many shareholders it can have.
The JOBS Act has been hailed as a bipartisan triumph.
Here’s the left’s response, per Rolling Stone’s Taibbi: The JOBS Act “couldn’t suck worse.” It will nearly legalise and encourage fraud on Wall Street. And it completely goes against the populist anger against Wall Street that sparked Occupy Wall Street.
The worst aspect of the bill, Taibbi argues, is one that exempts firms from independent tests of internal controls. It’s a “comedy routine,” he writes, because the rationale is that it is costly for a firm to hire independent auditors and fill out legal forms.
Here’s a good analogy:
This is like formally eliminating steroid testing for the first five years of a baseball player’s career. Yes, you can pretty much bet that you’ll see a lot of home runs in the first few years after you institute a rule like that. But you’d better be ready to stick a lot of asterisks in the record books 10 or fifteen years down the line.
In the same way, get ready for an avalanche of shareholder suits 10 years from now, since post-factum civil litigation will be the only real regulation of the startup market. In fact, there are already supporters talking up future lawsuits as an appropriate tool to replace the regulations being wiped out by this bill.
Here’s Taibbi talking about his column and why he thinks the JOBS Act is a disaster on Eliot Spitzer’s Current TV show:
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