That's what the JOBS (Jump-start Our Business Start-ups) Act will do: make it easier for people to commit fraud. Consider the following aspects of this proposed law:
- Now underwriters must be quiet while an IPO is ongoing. Under the JOBS bill, the underwriters could publish 'research' during the IPO. Furthermore, the company would not have any responsibility as to the underwriter's statements.
- Anyone can use the web to propose an investment idea and collect money for it. If you raise less than $1,000,000, no financial statements need be posted.
- Some public companies would be able to stop distributing financial information to its shareholders.
- Companies going public would not need to have effective and audited internal controls until their market value was $700,000,000 or revenue was $1 billion.
- Audited statements would not be needed.
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