It seems as though the JOBS Act has finally ended up on the desk of President Obama. With the complications it faced in the Senate and the debate that ensued over investor protections, it is a relief for some and a set-back for others to see the JOBS Act finally out into action.
According to Talk Radio News Service, President Obama will be signing the JOBS Act this Thursday. Once signed, the new policies and let-ups on current laws will be put into effect immediately. If you can remember, the bill was easily passed in the House and went on to the Senate where it encountered a few problems. Senate Democrats, particularly Majority Leader Harry Reid, took issue with the eased policies for Startups in regards to their investors. Under the new JOBS Act, the number of shareholders a startup company can acquire has been increased to 1,000- double the current number. However, what most people took issue with was the ease of certain regulations that are currently in place to protect investors.
Under the JOBS Act, startup companies and small businesses can sell up to $50 million of shares in IPO before registering with the Securities and Exchange Commission. This leaves more possibility for companies to take advantage of investors. If investors feel unsafe or insecure in a deal, then they are more likely to be more cautious with their investing. Cautious, safe investors aren’t great for the economy and can decrease the flow of economy in small business. Furthermore, small businesses haven’t been defined and can mean businesses that are in fact not small at all.
While the bill was in the Senate, they made a couple changes before voting on it (73 to 26) and handing it back over to the House. There the Act was passed again with a 380 to 41 majority. Whether you were against it or for it, the JOBS Act is being signed Thursday by Obama. In fact, Obama invited House Majority Leader Eric Cantor to the JOBS Act signing ceremony. Cantor was quoted saying, “I hope it’s that all of us are looking toward driving toward results and looking towards solutions. We all know there are plenty of differences between the two sides in Washington.”
For those that are opposed, the only thing they can do now is sit and wait to see what happens with the JOBS Act and how it really effects the movements and protections of investors.