“We The People” applaud our Senate for overcoming partisanship and passing a bill that will help get our economy moving again. The JOBS Act which had passed the House by an overwhelming bipartisan majority a few weeks ago passed the Senate yesterday by a vote of 73-26, albeit with a number of amendments that would bring the bill back to a House vote. I believe the House will pass the amended version expeditiously.
Recently, there has been a lot of heated rhetoric about this legislation. Unfortunately, most of the discourse has been stemming from those who couldn’t make a distinction between capital markets and CAPTIAL LETTERS.
During my 20 year career on Wall Street I had the opportunity to experience our capital markets at their best and at their very worst. In the 1990’s I had the privilege of being part of the ecosystem that took some of today’s most recognizable technology names public. I watched syndicates of small broker dealers unite to fund innovation and pool resources in order to support aftermarket trading. I experienced the results of those efforts as the Internet revolutionized the planet and changed the fabric of our everyday lives. I witnessed NASDAQ’s extraordinary rise and fall from a communal Quotron in a retail brokerage branch to a PC in my living room to a PDA standing in the middle of a third world country.
Sadly, I also observed the rapid decline of the capital markets as they were seized by program traders, PIPE funds and daytraders more interested in funding tickers than investing in businesses. To the detriment of innovation and entrepreneurship, those vital investment banking boutiques were driven out of business or gobbled up by big conglomerates. For nearly a decade now, our public markets have been monopolized by a handful of mammoth investment banking firms competing to underwrite the limited supply of large cap companies just so they can line their pockets by placing that stock in the accounts of their largest and most favored institutional clients. It was this practice, encouraged by antiquated regulation, that led to the demise of America’s economy.
The passage of The JOBS Act will put an end to this “circle of big” and once again allow capital to flow to our innovators, our entrepreneurs, our job creators! Additionally, it will level the investing playing field by permitting smaller investors to invest prior to a company’s greatest growth spurt instead of having to wait until the IPO when the majority of the appreciation had already passed. Imagine “the 99%” investing alongside “the 1%”and being afforded the same opportunities to build wealth? It’s easy if you try. Soon the world will live as one. Kumbaya.
This bill not only opens so many new doors to capital, but it also facilitates the procedures by which that capital can be obtained. Embedded in this legislation is Rep. Patrick McHenry’s “CrowdFunding” bill that finally brings our markets to the 21st century by allowing emerging private companies to raise capital via social media. This legislation also does away with other obsolete regulations such as the general solicitation and advertising ban for unregistered securities and the “500 shareholder rule”. All of these changes will enable companies to stay private longer and thrive in the private markets as opposed to dying a slow small-cap death in the treacherous public markets.
Times are changing. Technology is advancing. It is inevitable that our capital markets will be evolving. This is not just piece of legislation – this is progress.
Skeptics say that this bill undermines SEC oversight and would lead to fraud. Isn’t it funny how naysayers are quick to offer criticism without providing suggestions for improvement. If only it were as easy to form an idea as it is to critique one.
Is the bill flawless? No. But anything is better than the status quo, and in concert, our Wall Street veterans, business leaders, entrepreneurs, legislators & regulators can perfect it. I implore members of the SEC to join us at one of our upcoming events where thought leaders coalesce and endeavor to repair the damaged capital markets.
Collectively we can design the proper regulatory framework for the private markets. Together we can rebuild a capital markets that assures investor protection while enhancing capital formation. With our efforts unified, the U.S. capital markets will once again become the envy of the world.
We owe it to our children to leave them a prosperous America.
A Mom on Wall Street