Kathleen Pender: Financial regulations gutted in new bill – March 11, 2012

“It’s hard to believe that Democrats, who brought you the Dodd-Frank financial regulation act and the Consumer Financial Protection Bureau, are solidly backing a bill that would weaken or obliterate many regulations designed to safeguard investors. The bill, HR3606, sailed through the House Thursday with 222 Republicans and 168 Democrats voting for it. Only 23 members, all Democrats, voted against it. President Obama has endorsed the bill. The Senate is fast-tracking its own version, which could come to the floor Monday night. Under the guise of creating jobs, the House bill would make it easier for companies to raise money from the public without fulfilling some – or in certain cases virtually all – of the obligations designed to protect investors in public companies. However, there is no requirement or guarantee that companies would use any of the money to hire a single person. ‘My guess is the Republicans cannot believe they have suckered the Democrats into taking up their idea that deregulation is the way to promote job growth. It flies in the face of what the Democrats were arguing just a couple years ago. It completely undermines what they are trying to do to shore up our system of financial regulation,’ says Barbara Roper, director of investor protection for the Consumer Federation of America. She is not the only investor advocate fuming about the bill. ‘It’s an ill-advised, fundamental restructuring of the securities laws,’ says Mercer Bullard, president of Fund Democracy. Columbia Law School Professor John Coffee has nicknamed the bill’s crowd-funding provision, which would let private companies raise money from mom-and-pop investors over the Internet, the ‘boiler room legalization act.’ AARP, Americans for Financial Reform, the North American Securities Administrators Association and the Council of Institutional Investors have strongly opposed all or some parts of the bill. Arthur Levitt, chairman of the Securities and Exchange Commission under President Bill Clinton, told me, ‘The bill is a disgrace.’ Click here for more.