JOBS Bill Under Fire by SEC, NASAA, Consumer Advocates

Provisions of the bill include crowdfunding and lower requirements for SEC registration for companies with less than $1 billion in revenue. The North American Securities Administrators Association sent a letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Sen. Mitch McConnell, R-Ky., asking that they address a number of what it said were shortcomings in the bill, particularly with regard to crowdfunding, before passage.

NASAA was also critical of provisions that lessen audit requirements as well as the ability of state regulators to oversee companies’ efforts to raise capital. In addition, it said that many thresholds for consumer protection were too broad and eliminated important provisions for all but the largest of companies. In the letter, NASAA President Jack E. Herstein urged the Senate to address what he characterized as several critical weaknesses of the House bill.

“While NASAA applauds Congress’ desire to facilitate access to capital for new and small businesses, the version of the bill that passed the House is deeply flawed,” Herstein wrote. “State securities regulators support efforts by Congress to ensure that laws facilitating the raising of capital are modern and efficient, and that Americans are encouraged to raise money to invest in the economy. However, it is critical that in doing so, Congress not discard basic investor protections. Investment fraud is real, and it can be particularly pervasive in small exempted offerings.”

Senate Democrats have said they plan to address a number of the concerns voiced by critics in their own version of the bill.