[Congressional Record Volume 158, Number 47 (Wednesday, March 21, 2012)]
[Extensions of Remarks]
[Page E407]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  IN OPPOSITION OF H.R. 3606--THE JUMPSTART OUR BUSINESS STARTUPS ACT

                                 ______
                                 

                       HON. JANICE D. SCHAKOWSKY

                              of illinois

                    in the house of representatives

                       Wednesday, March 21, 2012

  Ms. SCHAKOWSKY. Mr. Speaker, on March 8, I voted against H.R. 3606, 
the Jumpstart Our Business Startups Act. H.R. 3606 has the admirable 
goal of increasing access to capital for small businesses, a goal that 
I strongly support. Unfortunately, I cannot support the legislation 
because, at the same time that it seeks to help small businesses, it 
takes away critical protections for investors.
  In the wake of the Enron scandal, Congress acted to improve corporate 
transparency and give potential investors--particularly small 
investors--access to the information they need to make sound financial 
decisions. H.R. 3606 eliminates many of those provisions and, by doing 
so, leaves unsophisticated investors vulnerable. We can and should 
promote the interests of American entrepreneurs and small business 
owners without taking away recently passed rights for small investors. 
It is the wrong medicine for American small business growth.
  The bill would give new companies up to five years to raise money 
from the public, eliminating the current requirements that an 
assessment of the soundness of the company's internal controls be 
included as part of the financial statement audit and made available to 
investors. That allows companies to raise money from unsophisticated 
investors without reasonable oversight of a company's operations.
  It would enable crowd-funding, mass solicitations to investors who 
will now lack basic information about a company's financial soundness, 
a practice that is not currently allowed.
  H.R. 3606 would increase the amount of capital that companies can 
raise from the public without triggering the full reporting and other 
obligations that are required under current law. That reporting 
includes compensation--including golden parachute compensation--of 
executives, making it incredibly difficult for even sophisticated 
shareholders to understand the status of their investment. In addition, 
it eliminates the Dodd-Frank requirement that shareholders approve 
compensation packages for emerging growth companies.
  The JOBS Act would promote uncertainty, undermine capital markets, 
and therefore increase the cost of capital for the same small 
businesses it is meant to help. It would put us on a return course 
toward laissez-faire economics that previously led to the collapse of 
enormous companies to the economic ruin of their employees and 
investors. It is for these reasons that H.R. 3606 is opposed by the 
Council of Institutional Investors, the Consumer Federation of America, 
AARP, Americans for Financial Reform, the North American Security 
Administrators Association, and other consumer and investor 
organizations.
  I urge my colleagues in the Senate to consider the ramifications of 
this legislation if it comes up for consideration.

                          ____________________