[Congressional Record Volume 158, Number 47 (Wednesday, March 21, 2012)]
[Senate]
[Page S1883]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                JOBS ACT

  Mr. LEVIN. Madam President, in a few minutes, we are going to vote on 
whether we should end debate on a House bill which carries the false 
label of a jobs bill--a bill which cries out for debate and amendment.
  If we continue down this track, we will approve legislation that 
endangers America's senior citizens, its small investors, and its large 
pension funds and foundations. In doing so, we would, far from 
encouraging job growth, endanger job growth, by endangering the 
investments that help America's businesses grow and create new jobs. 
The jobs bill before us, as it now stands, is anything but a jobs bill. 
And if we invoke cloture, we will end debate and the opportunity to 
remedy this bill's flaws. The Senate should not take that step.
  Its flaws are deeply worrisome. It threatens to dampen investment, 
and therefore dampen job growth, in at least six ways.
  First, investors are now protected by federal securities laws that 
generally prevent companies from making largely unregulated stock 
offerings to the public. By limiting such unregulated stock offerings 
to investors who can better withstand the substantial risk of these 
investments, we discourage fraud while allowing companies to access 
capital. But the House bill does away with these restrictions. They 
could market them with cold calls to senior centers. This would expose 
Americans with few protections against fraud and little ability to 
analyze complex, risky investments to devastating losses.
  It gets worse. The House bill changes when a company is large enough 
to warrant SEC disclosure and transparency requirements--from one with 
fewer than 500 shareholders to one with 2,000 or more shareholders, and 
perhaps many more. Those could be very large companies. In fact, the 
House bill maintains a loophole that allows shareholders of record, on 
paper, to hold shares for potentially hundreds of real owners as a way 
of evading this shareholder limit. They would be exempt from filing 
regular financial reports and other measures that give investors the 
confidence they need to invest their hard-earned dollars.
  Taken together, these first two flaws would allow even large 
companies to make largely unregulated stock offerings to potentially 
unwary investors, and to evade even the most basic requirements to 
accurately inform shareholders of their financial condition. Combined, 
these provisions are a recipe for fraud, abuse, financial crisis and 
reduced investment to grow our economy.
  The House bill has other deep flaws. It erases barriers, erected 
after the dotcom bubble of the 1990s, that prevent conflicts of 
interest in which investment banks could promote the stock offerings 
that they underwrite by having their research analysts provide pumped-
up assessments on the stock.
  This provision would mean that nearly 90 percent of all IPOs would be 
exempt from providing basic protections that help investors commit 
their money with confidence.
  Now, it has been said by supporters of this bill that we should 
approve this bill because the President supports it. I would remind my 
colleagues of two things. First, the President's support would not 
dissolve our own responsibility. We are in danger of rubber-stamping a 
bill simply because someone slapped a clever acronym with the word 
``jobs'' on it. If this bill threatens, rather than encourages, 
investment and job creation, we should repair its flaws. That is our 
responsibility. Madison told us two centuries ago:

       A senate, as a second branch of the legislative assembly, 
     distinct from, and dividing the power with a first, must be 
     in all cases a salutary check on the government.

  We should be that check today.
  Second, those who point to the President's support fail to mention 
another aspect of his position: support for common-sense fixes that 
protect the integrity of our markets. The White House said this week:

       The President strongly supports the efforts of Senate 
     Democrats to find common ground by supporting the most 
     effective aspects of the House bill to increase capital 
     formation for growing businesses, while also improving the 
     House bill to ensure there are sufficient safeguards to 
     prevent abuse and protect investors.

  The President supports this bill, yes--but he also supports improving 
it. And we should have the chance to do so.
  This is not a bill to promote investment in our economy. This bill 
will discourage investment. As SEC Chairman Schapiro wrote:

       If the balance is tipped to the point where investors are 
     not confident that there are appropriate protections, 
     investors will lose confidence in our markets, and capital 
     formation will ultimately be made more difficult and 
     expensive.

  Unless we protect investors, they will not invest in our economy. We 
can only add those protections if we slow this rush, debate this bill, 
and amend it. If we invoke cloture now, we end debate rather than 
beginning it. If we invoke cloture, we restrict amendment rather than 
allowing it. That would be a grave mistake, one that puts American 
investors, American workers and the stability of our economy at risk, 
and I urge my colleagues not to walk that path.
  Again, this bill would allow companies to advertise these virtually 
unregulated stock offerings on television or on billboards. This House 
bill would allow large companies with thousands of shareholders to 
avoid SEC regulation. The House bill would allow banks of any size to 
avoid SEC regulation if they have fewer than 1,200 shareholders. The 
House bill would allow companies with annual sales of up to $1 billion 
to evade the most basic transparency, accountability, and disclosure 
requirements in making initial public offerings.
  This is not a bill which will promote investment in our economy. This 
bill will discourage investment. As SEC Chairman Schapiro wrote us:

       If the balance is tipped to the point where investors are 
     not confident that there are appropriate protections, 
     investors will lose confidence in our markets.

  That is why the Council of Institutional Investors warns us ``this 
legislation will likely create more risks to investors than jobs.''
  This is not a bill which will allow new opportunities for American 
workers but one which will create new opportunities for fraudsters and 
boiler-room crooks. I urge defeat of cloture. We should not end debate 
on this bill and make it more difficult to amend this bill by 
restricting amendments.

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