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Latest SEC rule implementing JOBS Act is just in time for Labor Day

August 31, 2012

It’s beenPublic domain photo. two days since the SEC released its much-anticipated proposed rule that would, by mandate of the JOBS Act, remove the ban on general solicitation for certain types of securities offerings.   That’s also two days into the 30-day public comment period — but already the public comments are beginning to trickle in.  You can easily find them on Knowledge Mosaic by running this search.  (You can even set up an alert to be notified when new ones come in.)

And while it’s too early to judge, we can observe a distinctly seasonal quality in the public comments so far.  Seasonal?  Yes.  Not seasonal as in late summer — but seasonal as in Labor Day, which we celebrate on Monday.

Labor Day, after all, is traditionally about the the working stiff, the proletariat.  It is a holiday to celebrate those “real people” who contribute to the economy but who do not own it, run it, or get filthy rich off of it.  To mix metaphors, it is for the worker bees, not the fat cats.

In line with the tropes of Labor Day, the public comments thus far on SEC Release 33-9354 reflect an awareness of the divide between worker bee (extended to include small business owners) and fat cat (Wall Street types), with an advocacy for the former.   William Michael Cunningham, for example, observes that the JOBS Act “specifically seeks to benefit Small Businesses and Startups. It is not designed to benefit hedge funds. “  He complains that the new rule is liable to be exploited by the fat cats: “Now, hedge funds, the same firms responsible for the recent financial crisis and the lack of small business capital, are seeking a bigger loophole so that they can defraud and damage even more investors than they did last time.”

Writing in prose that is rougher but much more colorful, Derrick Rushnell makes the same point:

[T]he Real need is to benefit the small business market place. ( The businesses that are not tied to the “big firms, Wallstreet Investment Banks or Hedge Funds with a Fund of Fund strategy or a Pipe or a SPAC and on and on)It will benefit the mainstreet guy who wants to start a welding business or buy a pizza joint. I think you get my point the meat and potatoes marketplace that sometimes becomes a Microsoft…

Its indifference to proper punctuation notwithstanding, this is a great paragraph.  And it would fit just as well in a Labor Day speech as in a public comment to the SEC about a proposed rule.  (Rushnell’s alliterative “meat and potatoes marketplace that sometimes becomes a Microsoft” is especially rich, evoking at once Horatio Alger and Thomas Gray’s “mute inglorious Milton.”)

We’ll continue to follow agencies’ implementation and public companies’s compliance with the JOBS Act on Blogmosaic.  Stay tuned.   And Happy Labor Day.

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