President Obama this week signed the badly misnamed JOBS Act, a bill pushed by House Republicans that loosens important investor protections. Before the bill became law, federal regulators and business advocates warned that it would simply be an invitation to financial fraud. “This would be better known as the bucket-shop and penny-stock fraud reauthorization act of 2012,” said former Securities and Exchange Commission official Lynn Turner.
But if her word isn’t enough, perhaps we should listen to a convicted financial fraudster, who told Bloomberg News’ Susan Antilla that guys like him should love the JOBS Act:
[Mark] Morze, 61, hung his hat for 4 1/2 years at federal prisons in Lompoc and Boron, California, after pleading guilty to two counts of fraud for cooking the books at the infamous carpet-cleaning company ZZZZ Best (ZBSTQ) in the 1980s.
He says he’s baffled that President Barack Obama plans to sign a law today that amounts to an open invitation for fraud. “I wish legislators would consult with people like me before they write something like this,” he says, sounding dead serious about the offer. “I could tell them, ‘I know what your intent was with this wording, but we can get around it so easily, it cracks me up.”’
Antilla called the JOBS Act a “slapdash attempt at securities-law deregulation, plain and simple.” An analysis done for the Wall Street Journal shows that 104 companies that have had issues with their anti-fraud procedures since 2004 would have been exempt from audit under the JOBS Act.