* Treasury to hold closed-door roundtable on JOBS Act law
* Advocates to express concerns about investor protections
* SEC may consider adopting general advertising ban right
* Advocates expected to warn against immediate lifting of
By Sarah N. Lynch
WASHINGTON, July 31 Advocates for investors will
meet with U.S. Treasury Department officials and others on
Wednesday to express concerns about a new law that makes it
easier for smaller companies to raise capital, people familiar
with the matter said.
The Jumpstart Our Business Startups law, or JOBS Act, won
overwhelming bipartisan support from Congress in March.
But critics of the legislation have said it goes too far in
scaling back important protections for investors.
Wednesday's closed-door roundtable at Treasury is expected
to include senior Treasury and National Economic Council
officials, as well as representatives from the Securities and
Exchange Commission and the Financial Industry Regulatory
Authority, according to one person familiar with the lineup.
Other expected attendees include the AFL-CIO, several law
professors, the AARP, Americans for Financial Reform, and state
securities regulators, among others, the person said.
The new law reduces certain regulatory requirements for
companies with less than $1 billion in revenue seeking to go
public, raises the number of shareholders that trigger public
financial reporting and lifts a long-time ban on advertising for
Before the bill's passage, SEC Chairman Mary Schapiro and
SEC Commissioner Luis Aguilar both called for major changes to
the legislation, most of which were not adopted before President
Obama signed the measure into law.
A majority of bankers also agreed in a recent survey that
the law could open the floodgates for accounting problems.
Earlier this week, as the Sarbanes-Oxley law celebrated its
10-year anniversary, former Senator Paul Sarbanes said the JOBS
Act's lax regulatory scheme for IPOs below $1 billion in revenue
is a "scandal waiting to happen."
The SEC has been working to juggle the implementation of new
JOBS Act provisions along with its still massive workload from
the 2010 Dodd-Frank Wall Street reform law.
Some of the JOBS Act provisions went into effect right away,
but others still require rulemaking.
On Aug. 22, the SEC is slated to vote on one key JOBS Act
rule that lifts a ban on general solicitation for private
Because the SEC has already missed a 90-day deadline in the
law to implement the rule, the SEC is considering adopting an
interim rule that would lift the advertising ban right away, one
person familiar with the SEC's thinking said.
The SEC would then solicit comments after the rule was in
effect and make changes later, if needed.
The SEC has implemented new rules before seeking comment in
the past. But in most cases, the SEC first requests public
comments before putting a new rule on the books.
Going that route is likely to generate concern from critics
who have said that lifting the advertising ban without studying
the rule first may unduly harm investors.
In a May letter to the agency, the AFL-CIO, the Consumer
Federation of America and other investor advocates urged the SEC
not to simply lift the ban without first making "substantial
additional amendments" to make sure investors are adequately
The SEC's plans to adopt an interim rule is expected to be
discussed at the Treasury Department meeting on Wednesday,