The SEC In Action

I went to a panel today discussing the JOBS Act. The Act itself is only tangentially related to jobs, and is rather intended to deregulate, somewhat, the cumbersome and expensive process of raising capital in the public markets. 

One of the panelists was a current SEC commissioner, Daniel Gallagher.  He reported on how they are doing at implementing the Act.  Part of the JOBS Act calls for deregulation of the process sometimes called "crowd funding." But in the way of Washington, it is not self-implementing, but rather provides that it will take effect only on the adopting of new rules by the SEC.  Unfortunately, the SEC is woefully backed up in drafting all the other rules that Congress has asked it to draft. 

So Gallagher started talking about where they are. There are some 100 or more rules called for by the Dodd-Frank law, all of which were suppposed to have been adopted by sometime in 2011, and all still in limbo without a projected date. The "crowd funding" rule is caught in this endless queue. Meanwhile, what rule is actually moving forward and has reached the desk of the Commissioner for review? Why, the Conflict Mineral Rule! What is that you ask? Not that I'm one to stand up for warlords attempting to profit from "blood" minerals, but let's just say that conflict minerals have absolutely nothing to do with raising money in the US capital markets, or with any conduct in the US at all. However, all of the business of the SEC is backed up behind this cause. And by the way, the Commissioner candidly admitted that the Blood Mineral Rule will be extremely expensive to comply with, maybe even more expensive than the entire benefit to be gained from the deregulation of the JOBS Act. 

That's how our government works.