As President Obama prepares to sign the STOCK Act today and the JOBS Act tomorrow, Mercatus Center Senior Research Fellow Hester Peirce says that both of these laws treat only the symptoms of the problem, not the underlying cause. Peirce said:
“Those members of Congress who are shocked, just shocked, at stock trading on political information may want to look in the mirror, because they have created the problem. If they really wanted to solve it, they’d rethink the federal government’s micromanagement of the economy.”
“The JOBS Act would never have garnered such bipartisan support if the SEC had taken the lead in modernizing its rules to make it easier for entrepreneurs and small businesses to raise capital.
“Balancing investor protection concerns with capital formation is a complex undertaking, the details of which would benefit from regulatory expertise. Such expertise has been lacking here precisely because the SEC has refused to apply itself in a productive manner.”