Vermont Sens. Bernie Sanders (I) and Patrick Leahy (D) on Thursday trashed the Jumpstart Our Business Startups (JOBS) Act, saying it could lead to another financial crisis.
The Senate voted 73 to 26 to pass the bill, which was aimed at making it easier for small business’s to raise capital. But critics warned the bill severely weakened investor protections by easing various Securities and Exchange Commission regulations.
“The so-called ‘JOBS Act’ is an extremely anti-consumer, anti-investor, and anti-jobs bill,” Sanders said in a statement. “As currently drafted, the bill is opposed by the Securities and Exchange Commission chairman (as well as past SEC chairmen appointed by both political parties); AARP; the AFL-CIO; the Consumer Federation of America; Consumers Union; and the Council of Institutional Investors, among many others. There is good reason for the opposition.”
“At best, this bill could make it easier for con artists to defraud seniors out of their entire life savings by convincing them to invest in worthless companies. At worst, this bill has the potential to create the next Enron or Arthur Andersen scandal or an even worse financial crisis.”
Leahy added that deregulation could jeopardize the entire American economy.
“The top priority of Congress should be creating new jobs to help Vermonters get back to work, not reopening loopholes in federal law that led to catastrophic scandals like Enron, WorldCom and Bernie Madoff,” he said.
The House voted 390 to 23 to approve the JOBS Act two weeks ago.
The Senate version of the bill included an amendment that placed restrictions on crowdfunding, where businesses gather small investments from a very large amount of people. The House will have to accept the Senate version of the bill before it can be signed into law by President Barack Obama.