Having just won hedge fund manager Paul Singer‘s endorsement, Marco Rubio is all in for Wall Street. Rubio is always happy to bend over backwards for billionaires (see: Koch brothers, Norman Braman, Sheldon Adelson). Today, he’ll be performing his best puppet impression at a fundraiser in New York, hoping to boost his campaign funds after raising less than $6 million last quarter.
Singer has been a significant bundler for the GOP, raising $5 million for Mitt Romney at a single event in 2012, and Rubio spent months wooing the billionaire.
Singer is notorious for insensitivity towards working Americans, which is likely what draws him to Rubio and his regressive policies. Rubio’s tax plan is extremely favorable to the top one percent, giving top earners big breaks while leaving the middle class behind. Rubio has also repeatedly proven his allegiance to big banks over consumers, voting at least six times since taking office in 2010 to repeal Dodd-Frank despite the important consumer protections the reform provides.
These are factors that likely went into Singer’s endorsement, who is known for demanding a return on his political donations:
An analysis of Singer’s political spending reveals both that he expects a return on his investment and the central role he plays in funding conservative politics. As Hedge Clippers reports, 12 Members of Congress who received a combined $200,000 from Singer and Singer-connected PACs wrote a letter to Attorney General Eric Holder in 2013, urging Holder to side with Singer’s hedge fund in its protracted battle against Argentina.
No doubt a presidential endorsement from Singer comes with strings attached.
Wall Street big whigs and billionaires like Rubio — not because he’ll be good for the economy — but because he’ll ensure they can continue to get away with corrupt and hurtful policies like those that caused the 2007 financial crisis.
Rubio & Wall Street
- Rubio said “I’m not anti-Wall Street,” and argued that millionaires should be treated “fairly.”
- Rubio attacked Hillary Clinton for accepting Wall Street contributions, but received hundreds of thousands from Securities, Investment, Financing and Banking interests.
- Rubio received $117,000 from a hedge fund manager Paul Singer the same day that Congress passed Wall Street Reform.
- Rubio voted to repeal Dodd-Frank four times.
- Rubio voted to delay capping debit card fees charged by banks.
- Rubio supported eliminating the Capital Gains Tax.
- Rubio voted against increasing investor protections designed to prevent crowdfunding scams.
- Rubio voted to loosen public disclosure laws for small companies seeking investors.
Wall Street, Generally
Said He Was “Not Anti-Wall Street” And That We Should Just Treat Millionaires “Fairly”
Rubio In 2014: “I’m Not Anti-Wall Street;” And That Millionaires Should Be Treated “Fairly” But “What We Should Be Fighting For Is Main Street.” According to a blog post by Mitch Perry in the Saint Peters Blog, “And then putting on a little Elizabeth Warren spin, Rubio went on a a bit of anti-Wall Street screed, saying that ‘If she runs for President, no candidate in American history will have more support in the boardrooms than Hillary Clinton. That’s a fact! And yet the average voter doesn’t believe that. I’m not anti-Wall Street. It has a place in our society, but what we should be fighting for is Main Street … the people who are trying to get ahead. The people who have millions of dollars in their bank accounts, we just need to treat them fairly. They can take care of themselves. But the person trying to start a business out of a spare bedroom in their home? They’re the ones that need the lowest tax rates. They’re the ones who need regulations to be under control. They’re the ones who need us to bring the national debt under control. They’re the ones that need help.’” [Saint Peters Blog, 12/6/14]
Rubio Attacked Hillary For Taking Wall Street Contributions
Rubio: “If Hillary Clinton Runs For President, She Will Get More Money Out Of Wall Street Than Any Presidential Campaign Ever.” According to Politico, “If Hillary Clinton runs for president, she will get more money out of Wall Street than any presidential campaign ever,’ Rubio said of the likely 2016 Democratic frontrunner. ‘And that’s a fact! And part of the reason is because many of these industries feel very comfortable with her there … These are the sorts of things we need to talk about more, because this misconception has been created that somehow big government helps the people who are trying to make it. And nothing could be further from the truth.’” [Politico, 2/23/15]
But He Collected Hundreds Of Thousands From Wall Street Interests
January – October, 2010: Rubio Received At Least $600,000 From Securities, Investment, Financing And Banking Interests. According to The Bradenton Herald, “Rubio, in all, got at least $600,000 from securities, investment, financing and banking interests, according to the Center for Responsive Politics, which tallied reports through Oct. 13. Wall Street had been contributing to Democrats, who held the White House and Congress after 2008. But while the reforms were weakened somewhat, what passed was still substantial.” [Bradenton Herald, 11/20/10]
2010: Rubio received $117,000 From a Hedge Fund Manager, The Same Day Congress Passed Wall Street Reform
2010: Rubio Received $117,000 From A Single Hedge Fund Manager Who Held A Pro-Rubio Fundraiser The Same Day Congress Passed Wall Street Reform Legislation. According to The Bradenton Herald, “On the same day in June that the U.S. House of Representatives passed expansive Wall Street reforms, an influential hedge fund manager who strongly opposed the legislation was holding a fundraiser in his Manhattan apartment for Marco Rubio. Rubio was in Miami but collected thousands of dollars for his U.S. Senate campaign that day, and people associated with the hedge fund contributed $117,000 overall as his long shot bid took off.” Bradenton Herald, 11/20/10]
Hedge Fund Manager Paul Singer Is Rubio’s Second Largest Contributor; Held A New York City Fundraiser For Him
2010: Hedge Fund Manager Paul Singer Hosted A New York City Fundraiser For Marco Rubio. According to The Miami Herald, “Politico reported that Paul Singer, who founded hedge fund Elliott Management, hosted a New York City fundraiser for several Senate hopefuls, including Rubio. ‘Marco Rubio is now the Republican establishment’s candidate, but now it is clear he’s Wall Street’s candidate too,’ said Eric Jotkoff, Florida Democratic Party spokesman.” [Miami Herald, 7/2/10]
- Singer’s Hedge Fund Is Rubio’s Second Largest Contributor, Donating $86,242. According to The Miami Herald, “Elliott Management is the second largest contributor to Rubio’s campaign, according to the Center for Responsive Politics, which found $86,242 in donations tied to the hedge fund as of the end of March. Another top Rubio contributor is Alliance Capital Managent, which was sued by the state of Florida for losing hundreds of millions in pension funds by investing in Enron. The state lost the case. In a broader look at donations to Rubio by industry, the securities and investment industry came in third, behind retirees and Republican/conservative groups, with $236,675. Rubio’s campaign did not respond to a request for comment.” [Miami Herald, 7/2/10]
2015: Rubio Fundraised Off Of Financial Industry Executives In New York
September 2015: Rubio Held A $1,000 Minimum Donation Fundraiser In Which He Invited 20 “Top Financial Industry Executives In New York.” According to Politico, “Jeb Bush and Marco Rubio are headed for a smackdown on Wall Street. The former Florida governor and current Florida senator have dueling fundraisers set for the week of Oct. 12 with top financial industry executives in New York as Bush looks to maintain his dominance in the industry despite low poll numbers and Rubio hopes to capitalize on recent momentum to make his case to the deep-pocketed Republican establishment.[…] Rubio’s invite features 20 people,including younger and less well-known but rising figures such as Courtney Geduldig, a former Senate Banking staffer now at McGraw Hill Financial. The event, which requires a minimum $1,000 donation and $2,700 to serve as a ‘host,’ will take place at 6 p.m. Oct. 14 at the Fifth Avenue offices of Phil Rosen, a co-chair of law firm Weil Gotshal’s real estate practice and a close associate of billionaire GOP mega-donor Sheldon Adelson. The event invite also features Wayne Berman, a top D.C.-based executive at private equity firm Blackstone Group, who was an early Rubio backer. Jewish Insider first reported on the Rubio invite on Sunday.” [Politico, 9/29/15]
Opposed Raising Taxes On Wealthy
Claimed Raising TAxes On Wealthy Was Punishing The Successful
2015 Video: Rubio Said Raising Taxes On The Wealthy Was “Punishing” The Successful And “Counterproductive.” While appearing on Face The Nation, Rubio said, “This is a 20th century, outdated model the president is following. The notion first of all that in order for some people to do better, someone has to do worse is just not true. Raising taxes on people that are successful is not going to make people that are struggling more successful. The good news about free enterprise is that everyone can succeed without punishing anyone. It would also be counterproductive.” [Face The Nation, 1/18/15]
Rubio Said Raising Taxes On Millionaires, Billionaires, Oil Companies, And Owners Of Private Jets Would Not Help Relieve The National Debt. In a speech on the Senate floor, Rubio said, “‘The idea that if we raise taxes, as the President said, on millionaires and billionaires, raise taxes on oil companies, raise taxes on owners of private jets, that that somehow is going to make a difference in America’s debt in terms of having a real impact, is not only misleading, I think, quite frankly, it’s disappointing. It’s class warfare, and it’s the kind of language that you would expect from the leader of a third world country, not the President of the United States.’” [Official Website of Senator Marco Rubio, 6/30/11]
Rubio Voted Four Times For Repeal Of The Dodd-Frank Act
2013: Rubio Voted For Repealing Dodd Frank Wall Street Reform Act As Part Of The FY 2014 Ryan Budget. In March 2013, Rubio voted for repealing the Dodd-Frank regulations for financial institutions, as part of House Budget Committee Chairman Paul Ryan’s (R-WI) proposed budget resolution covering fiscal years 2014 to 2023. According to the House Budget Committee, “This budget would end the bailout regime enshrined into law by the Dodd-Frank Act. The federal government must ensure financial markets are fair and transparent. And it must hold accountable those who violate the rules. But federal bureaucrats should not micromanage the system or protect Wall Street bankers from the risks they are taking.” The vote was on the House Republicans’ fiscal year 2014 budget resolution, which Senate Budget Committee chairwoman Patty Murray offered as a substitute amendment to the Senate’s fiscal year 2014 budget resolution. The Senate rejected the amendment by a vote of 40 to 59. [Senate Vote 46, 3/21/13; House Budget Committee, 3/12/13]
2012: Rubio Effectively Voted To Repeal Dodd Frank Financial Reform Act As Part Of The FY 2013 Ryan Budget. In May 2012, Rubio effectively voted to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act’s regulations for financial institutions, as part of House Budget Committee Chairman Paul Ryan’s (R-WI) proposed budget resolution covering fiscal years 2013 to 2022. According to the House Budget Committee, “This budget would end the bailout regime enshrined into law by the Dodd-Frank Act. The federal government has a critical role in helping to ensure financial markets are fair and transparent, and in holding accountable those who violate the rules. But even though that role is critical, it is a limited one: Federal bureaucrats should not be empowered to micromanage the financial system, and this budget will review financial regulations to ensure that the costs to the private sector and to the taxpayer do not outweigh their benefits, and that regulations are both essential and not unduly burdensome.” The vote was on a motion to proceed to consider the House-passed budget resolution, which the Senate rejected by a vote of 41 to 58. [Senate Vote 98, 5/16/12; House Budget Committee, 5/20/12; Congressional Actions, H.Con.Res. 112]
2011: Rubio Voted For A Republican Jobs Proposal Known As The “Jobs Through Growth Act” That Included A Provision To Repeal The Dodd-Frank Financial Reform Law. In November 2011, Rubio voted for an amendment that would have put in place a number of Republican policy priorities. According to The Hill, “‘The ‘Jobs Through Growth Act,’ penned by Sen. John McCain (R-Ariz.) […] included a Sense of the Congress that a balanced budget to the Constitution is needed, a provision to make it easier for the government to rescind unspent funds and a reduction in taxes for individuals and companies. It also would have repealed last year’s healthcare law and the Dodd-Frank financial reform law.” The amendment was a second-degree amendment to a bill to end the withholding requirement for payments to government contractors. The Senate rejected the amendment by a vote of 40 to 56. [Senate Vote 202, 11/10/11; The Hill, 11/10/11]
2011: Rubio Effectively Voted For The FY 2012 Ryan Budget, Which Would Have Repealed Dodd-Frank Financial Reform Act. In May 2011, Rubio effectively voted for revisiting the Dodd-Frank regulations for financial institutions, as part of House Budget Committee Chairman Paul Ryan’s (R-WI) proposed budget resolution covering fiscal years 2012 to 2021. According to the House Budget Committee, the budget “propose[d]s to end the cycle of future bailouts perpetuated by the financial-regulation law authored last year by Senator Chris Dodd and Representative Barney Frank (Dodd-Frank).” The vote was on a motion to proceed to consider the House-passed budget resolution, which the Senate rejected by a vote of 40 to 57. [Senate Vote 77, 5/25/11; House Budget Committee, 4/5/11]
Debit Card Fees
Voted To Delay Rules To CAP Bank Fees On Debit Cards After Financial Sector Pressure
2011: Rubio Voted For Delaying Dodd-Frank Rules Capping Bank Fees Charged To Retailers For Debit Card Transactions. In June 2011, Rubio voted for an amendment that, according to ABC News, “would delay the implementation of the Dodd-Frank Wall Street reform law, which cuts to 12-cent fee cap that banks charge retailers for debit card transactions.” The Senate rejected the amendment by a vote of 54 to 45; under a unanimous consent agreed it required 60 votes to pass. [Senate Vote 86, 6/8/11; Bill Summary and Status, S Amdt 392; ABC News, 6/8/11]
- The Federal Reserve Proposed Rules To Cap Debit Card Fees At 12 Cents Per Transaction.According to the New York Times, “When the Senate returns next week, Senator Jon Tester, a Montana Democrat in a tough re-election bid, is expected to get a chance to offer an amendment that would delay the implementation of a reduction in fees that is part of the Dodd-Frank financial regulation law. […] The Federal Reserve has proposed rules that would limit the fees charged by banks to 12 cents per transaction, down from the current average of 44 cents per transaction.” [New York Times, 6/2/11]
- Financial Companies Pushed For A Delay Claiming That The “Lucrative” Debit Card Business Would Become Unprofitable Under The Rule.According to the New York Times, “Banks and credit-card companies have been pushing for the delay – or an outright repeal of the provision – because they say it will make the what’s now a lucrative debit-card business unprofitable for many banks, particularly smaller community banks like those in Mr. Tester’s home state.” [New York Times, 6/2/11]
- The Amendment Proposed Delaying Implementation Of Dodd-Frank Debit Card Fee Regulation For One Year.According to National Journal, “Tester and Corker had originally proposed a 24-month delay, then shortened it to 15 months and on Tuesday filed an amendment to reduce it to 12 months in a bid to pick up support. The Tester-Corker measure would require bank regulators to study the impact of the Durbin regulation on consumers and community banks and credit unions for six months. It requires regulators to issue a rule implementing new swipe fee rates six months later but gives them power to include a wider range of costs which could let banks charge more than the Fed is currently proposing.” [National Journal, 6/8/11]
- Retailers Opposed The Amendment Because They Said Higher Debit Card Fees Forced Them To Charge Higher Prices To Consumers.According to Bloomberg, “The banks’ loss was a major victory for the U.S. retail industry, which pushed for the fee-cap provision added to Dodd-Frank by Senate Democrat’s No. 2 Richard Durbin of Illinois. Retailers contend that the current debit-card fee structure isn’t competitive and that they forced to charge consumers higher prices because banks are gouging them on swipe fees.” [Bloomberg, 6/9/11]
Capital Gains Tax
Rubio Supported Eliminating Capital Gains Taxes
Rubio Supported Broad Tax Cuts, Including The Elimination Of Capital Gains Taxes. According to Sun-Sentinel, “Rubio called for widespread tax cuts, including eliminating capital gains taxes and the estate tax, which fall more heavily on the wealthy. He also called for a flat tax simple enough that people could file their tax returns on the back off a post card.” [Sun-Sentinel, 3/23/10]
THE IRS PROPOSED A RULE REQUIRING BANKS TO REPORT ACCOUNT INFORMATION OF FOREIGN INVESTORS
The IRS Proposed A Rule Requiring Banks To Report Personal Account Information Of Foreign Deposits That Receive Interest Payments. According to Houston Business Journal, “For decades, the U.S. financial system has profited from foreign depositors parking their cash in U.S. banks, boosted by a tax-haven image. Houston has seen a disproportionately large percentage of such deposits, specifically from Mexico. But by the end of March, the IRS is expected to finalize a rule that would require banks to disclose personal account information of foreign deposits that receive interest payments to the IRS.” [Houston Business Journal, 2/24/12]
The IRS Aimed To Collect Tax Dollars From Foreign Depositors By “Trading Key Account Information With Other Governments.” According to Houston Business Journal, “The goal is to reel in tax dollars from those foreign depositors by trading key account information with other governments. Upon request, the IRS could relay the information to depositors’ homeland tax authorities without going through a bank.” [Houston Business Journal, 2/24/12]
Investors From Certain Countries Feared Release Of Account Information Could Lead To Them Being Targeted For Political Reprisal, Crime. According to Houston Business Journal, “For Mexican, South American and other Latino foreign national depositors, it could mean more than reprisals from their governments — it may mean their information potentially falls into the wrong hands, as it creeps along the countries’ insecure mail systems, putting them in danger of kidnapping or worse. ‘They don’t want this information to be disseminated,’ said Gerry Schwebel, executive vice president of the international division at IBC Bank, a Laredo-based bank with deep roots in Houston. ‘It’s not that they’re trying to keep a secret or doing anything wrong, it’s just that they are concerned for their safety.’ Schwebel said after recent Mexican media reports of the new rule, IBC Bank has been ‘getting phone calls immediately’ from worried depositors.” [Houston Business Journal, 2/24/12]
RUBIO INTRODUCED LEGISLATION TO STOP THE RULE
Rubio: IRS Rule Requiring Banks To Report Interest Earned By Foreign Investors “Will Have Disastrous Consequences For Florida Unless It Is Stopped From Taking Effect.” In an editorial for the Miami Herald, Rubio and Rep. Bill Posey (R-FL) argued that a proposed IRS regulation requiring banks to report interest earned by foreign investors would be particularly damaging for Florida. “Unfortunately, our state could lose tens of billions of dollars in foreign deposits if the IRS regulation takes effect. For some banks in Florida, these deposits represent as much as 90 percent of their capital, and even a small withdrawal could result in bank failures and more bailouts by struggling American taxpayers. Another compelling reason to scrap the IRS’s mandate is that the release of sensitive financial information to foreign governments like Venezuela would put individuals and their families at risk of political persecution, criminal harm, extortion and kidnapping. Even the thought of such a risk would be enough to motivate many to transfer their money out of the American economy and to countries like Hong Kong or Singapore where the U.S. has little or no oversight. When another less-onerous regulation requiring the reporting of foreign deposit interest was proposed in 2001, it was opposed by a bipartisan coalition of more than 100 members of Congress and was quickly withdrawn. Given that our economy is in a far worse state today, the case for shelving this pointless mandate is even more compelling.” [Miami Herald, 3/7/12]
- Rubio Introduced Legislation To Block The Rule.According to the Orlando Sentinel, “‘This is going to have a devastating impact on Florida and Florida banks,’ said U.S. Sen. Marco Rubio, R-Fla., who has filed legislation, along with U.S. Rep. Bill Posey, R-Rockledge, to block the rule.” [Orlando Sentinel, 4/19/12]
- House Version Of Rubio’s Bill Postponing IRS Regulation Of Interest Earned By Foreign Investors Passed By 251-165.According to the Orlando Sentinel, “A new IRS rule designed to find tax cheats got a thumbs-downThursday from the U.S. House, which moved to delay its implementation over fears it would hurt the economy. By a 251-165 vote, the U.S. House backed a measure sponsored by U.S. Rep. Bill Posey, R-Rockledge, that would postpone the IRS regulation — which will shine more light on foreign deposits in U.S. banks — until the nationwide unemployment rate improves to 6 percent; it now sits at 8.2 percent. […] It remains uncertain whether Posey’s legislation will get through the Senate. U.S. Sen. Marco Rubio, R-Florida, is building support there to block the IRS rule, though he admitted another course could prove more effective. ‘Ultimately, the best route is not a legislative one, but to put the IRS under pressure to reconsider their ruling,’ he said.” [Orlando Sentinel, 7/27/12]
Rubio Voted Against Increasing Investor Protections IN Equity Crowdfunding Bill
Rubio Voted Against Increasing Investor Protections In Bill Legalizing Equity Crowdfunding. In March 2012, Rubio voted against an amendment that, according to the New York Times, “set stricter limits on how much small investors can invest in a crowd-funding offering, an online sale of small amounts of shares to individuals,” and “would require companies to provide tax returns or financial statements to investors before the offering.” The Senate agreed to the amendment by a vote of 64 to 35. The underlying bill, the Jumpstart Our Business Startups (JOBS) Act of 2012, passed the Senate. After the House agreed to the Senate’s revised version, the president signed the bill into law. [Senate Vote 54, 3/20/12; Congressional Actions, H.R. 3606; Congressional Record, 3/22/12; New York Times, 3/21/12]
- Equity Crowdfunding Allowed Start-Ups And Small Businesses To Raise Equity From Large Pools Of Small Investors.According to Newsday, “Businesses will soon be able to harness the power of the ‘crowd’ to raise equity funding via a large pool of small investors. That’s because the new federal JOBS Act (Jumpstart Our Business Startups) allows a new type of financing: equity ‘crowdfunding.’ The change could generate hundreds or thousands of new investors for start-ups and small entities via online funding portals, say experts. ‘It creates a mass market for private equity investments and allows companies to solicit direct to the public for equity investments,’ explains Clifford Holekamp, senior lecturer in entrepreneurship at Washington University in St. Louis.” [Newsday, 5/14/12]
- Merkley: House Version Of Bill Allowed Room For “Predatory Scams.”According to the Congressional Record, Senator Merkley stated: “I want to encourage you to adopt amendment No. 1884. The House bill, as it came to us, on crowdfunding is a pathway to predatory scams. It requires no information to be provided by a company; and if the company provides information, it requires no responsibility or accountability for the accuracy of that information. It allows companies to hire people to pump the stocks, which is exactly what we all know, from pump-and-dump schemes, is very devastating to any sort of solid financial foundation for capital aggregation, capital formation.” [Congressional Record, 3/22/12]
- Merkley’s Amendment Lowered Amount Individual Could Invest Annually Through Crowdfunding For Those With Net Worth Or Annual Income Below $100,000.According to the New York Times, “While the House bill would allow individual investors to invest up to $10,000, or 10 percent of their annual income, a year in crowd funding. The Merkley-Brown amendment would limit those investments to $2,000, or 5 percent of income in crowd funding, for individuals with annual income or net worth of less than $100,000, whichever is more.” [New York Times, 3/21/12]
- Unlike House Version, Merkley’s Amendment Required Crowdfunding Intermediaries To Register With Securities Regulators.According to CQ, “Like language in the House bill, it would legalize the investment method known as crowdfunding, which involves pooling money, usually via the Internet. But the amendment would require anyone acting as a crowdfunding intermediary to register with securities regulators. The original House bill had exempted such registration if crowdfunding amounted in issued securities to less than $1 million total or $10,000 per investor.” [CQ, 3/26/12]
- American Conservative Union Opposed Amendment; Said It Would “Restore Restrictive Conditions” Impairing Crowdfunding.The ACU opposed the amendment, stating: “The Senate adopted the Merkley amendment to a bill making it easier for businesses to attract small investors through the technique of ‘crowdfunding,’ through which small investors pool their funds through the internet. The amendment would restore restrictive conditions that make ‘crowdfunding’ difficult. ACU supports efforts to allow small businesses to attract capital and opposed this amendment.” [American Conservative Union, 2/22/13]
Voted To Ease Dislcosure And REgulatory Requirements For Small Companies Seeking Investors
2012: Rubio Voted For Easing Disclosure And Regulatory Requirements For Small Companies Seeking Investors, As Part Of The Jobs Act. In March 2012, Rubio voted for a bill that, according to CQ, “ease[d] Securities and Exchange Commission (SEC) reporting and regulatory requirements on public and privately held small businesses looking to raise capital.” The bill passed the Senate, 73-26; following House approval, it was signed by the president into law. [Senate Vote 55, 4/22/12; H.R.3606, 4/5/12; CQ, 5/1/12]
- Bill Created “Emerging-Growth Companies,” Which Were A Category Of Issuers Of Stock IPOs.According to CQ, “The law creates a new category of issuers of initial public offerings (IPOs) of stock to be defined as ‘emerging-growth companies.’” [CQ, 5/1/12]
- JOBS Act Allowed “Emerging-Growth Companies” To Submit Two Years Of Audited Financial Statements Rather Than Three.According to CQ, “The law requires emerging-growth companies to present the previous two, rather than three, years of audited financial statements, as currently required. Such companies are not be required to comply with the accounting standards written into statute by the Sarbanes-Oxley Act of 2002 (PL 107-204). […] It also allows an emerging-growth company to forgo such exemptions.” [CQ, 5/1/12]
- JOBS Act Exempted “Emerging-Growth Companies” From Sarbanes-Oxley Independent Auditing Requirements.According to CQ, “[Emerging-growth companies] are also exempt from the independent auditing requirements of the Sarbanes-Oxley Act. Instead, emerging-growth companies must comply with the lesser standards currently applied to companies that have a market capitalization of no more than $75 million. It also allows an emerging-growth company to forgo such exemptions.” [CQ, 5/1/12]
- Equity Crowdfunding Provisions Allowed Start-Ups And Small Businesses To Raise Equity From Large Pools Of Small Investors.According to Newsday, “Businesses will soon be able to harness the power of the ‘crowd’ to raise equity funding via a large pool of small investors. That’s because the new federal JOBS Act (Jumpstart Our Business Startups) allows a new type of financing: equity ‘crowdfunding.’ The change could generate hundreds or thousands of new investors for start-ups and small entities via online funding portals, say experts. ‘It creates a mass market for private equity investments and allows companies to solicit direct to the public for equity investments,’ explains Clifford Holekamp, senior lecturer in entrepreneurship at Washington University in St. Louis.” [Newsday, 5/14/12]
- At The Time, Law Prohibited General Advertising And Solicitation By Startups Seeking Private Investors.According to the Congressional Research Service, “Under federal securities law, certain provisions exist that exempt companies from having to register with the SEC when marketing securities to investors. One such exemption, Rule 506, is used by various start-ups when raising money. The chief limit imposed on companies using Rule 506 is that their securities offering must be principally limited to what are known as accredited investors and that there can be no general solicitation, meaning that the offering must entail a targeted solicitation of accredited investors. This has meant that companies could not broadly advertise their Rule 506 offerings through mass media such as television and print publications.” [CRS, 5/23/13]
- AFL-CIO Opposed Bill; Claimed It Would Reduce Regulatory Protections On Retirement Savings, Create Few Jobs And Weaken Confidence In Capital Markets.According to their Legislative Voting Record, AFL-CIO opposed the bill, stating: “The ‘Jumpstart Our Business Startups (JOBS) Act’ would reduce critical regulatory protections for investors that are essential to safeguarding the retirement savings of America’s workers from fraud and other risks. The so-called ‘Jobs Act’ would create few jobs and would instead inevitably weaken investor confidence in our capital markets by creating new and expanded loopholes in our securities laws.” [AFL-CIO, Viewed 7/19/13]