GOP Lawmaker Accuses Regulator of Ignoring the Will of Congress in Implementing Sec. 201 of the JOBS Act

Representative Patrick McHenry, Chair of the TARP and Financial Services Subcommittee, accused Mary L. Schapiro, Chair of the SEC, of abdicating her responsibility and ignoring the will of Congress in implementing Section 201 of the JOBS Act. Section 201 requires the SEC to remove the ban on general solicitation for certain issuers of equity capital. According to McHenry, by issuing a proposed rule (rather than an interim final rule), the SEC is showing it is unlikely to finalize the rule until next year. Under the law, the SEC was required to implement the provision within 90 days of the bill becoming law.

Chair McHenry has noted that an interim final rule would neither preclude additional public comment nor preclude revising the rule at a later date as appropriate. Thus, according to McHenry, the Commission's decision to delay implementation of this important part of the JOBS Act is a reflection of ideological opposition to a bipartisan effort by Congress and the President to improve the conditions for capital formation. In the letter, McHenry requested documents (relating to potential action by the SEC to implement Section 201) by August 30th. McHenry has set a hearing for September 13th to examine the SEC's implementation of the JOBS Act.

[Lofchie Comment: Note that implementation of the JOBS Act is a matter of some controversy. In yesterday's news, we reported aletter from NASAA urging the SEC to go slow on implementing the JOBS Act. See also the related items in today's news as to an upcoming open meeting of the SEC.]

Cross-Reference(s): JOBS Act Sec. 201; Cadwalader Guide to Blue Sky Law; JOBS Act; JOBS Act Section Summaries.

View letter in full here (links externally to Oversight House website).