Legislation that was supposed to help smaller companies go public has aided larger firms to keep financial data out of the hands of investors.
The “Jumpstart Our Business Startups Act” (or JOBS Act) was promoted by President Barack Obama as a way to assist small businesses in their efforts to raise money through IPOs (stock market launches).
The same legislation, though, made it possible for larger companies (those earning less than $1 billion a year) to dodge reporting details about executive compensation and financial histories to the Securities and Exchange Commission.
Companies also can delay disclosing their plans to go public until just before the big day, under the JOBS Act.
“In effect, it means the press and potential investors have less time to comb through financial information, as well as less information to examine,” wrote James Temple in the San Francisco Chronicle.
The abuse of the law should not come as a surprise. At the time that the JOBS Act passed through Congress, Democratic Senator Carl Levin of Michigan warned, “We are about to embark upon the most sweeping deregulatory effort and assault on investor protection in decades.… It will allow vast new opportunities for fraud and abuse in capital markets.”
Meanwhile, the new law, which was adopted in April, hasn’t done much to boost the numbers for IPOs, according to Ernst & Young. This year, 130 companies raised $45 billion on U.S. exchanges, compared to 124 businesses and $40 billion in 2011.
The JOBS Act was the “brainchild” of the President’s Council on Jobs and Competitiveness, which is headed by General Electric CEO Jeffrey Immelt and, at the time the JOBS Act was proposed, consisted of 18 corporate CEOs and investment executives, two academics and two labor leaders.
December 16, 2012 Posted by aletho | "Hope and Change", Corruption, Economics | Chief executive officer, General Electric, Initial public offering, James Temple, Jeffrey R. Immelt, Obama | Leave a comment
Compensation for chief executives at American companies grew 15 percent in 2011 after a 28 percent rise in 2010, part of a larger trend that has seen CEO pay skyrocket over the last three decades. Workers, on the other hand, have been left behind.
Since 1978, CEO pay at American firms has risen 725 percent, more than 127 times faster than worker pay over the same time period, according to new data from the Economic Policy Institute:
From 1978 to 2011, CEO compensation increased more than 725 percent, a rise substantially greater than stock market growth and the painfully slow 5.7 percent growth in worker compensation over the same period.
In 1978, CEOs took home 26.5 times more than the average worker. They now make roughly 206 times more than workers, EPI found. The pay isn’t always tied to the performance of their businesses – as ThinkProgress has noted, CEOs at companies like Bank of America often pocket huge pay increases even as the company’s stock price plummets and jobs are cut.
As a result, American income inequality has skyrocketed, growing worse than it is in countries like Pakistan and Ivory Coast. Wealth inequality is worse than it was even in Ancient Rome. And, as pay skyrockets and tax rates fall for the richest Americans, the rising inequality has left the bottom 95 percent of Americans saddled with more debt than ever before. – thinkprogress.org
Workers’ wages aren’t tied to productivity either. Despite substantial gains in productivity since the 1970s, worker pay has remained flat. According to Labor Department data cited by the Huffington Post, inflation-adjusted wages fell 2 percent in 2011. – thinkprogress.org
Working and middle-class Americans have seen their debt balloon since the 1980s. Today, Americans owe some $704 billion in credit card debt, and more than that in both auto loans and student borrowing. CNN
- Executive Excess in the New Gilded Age (alethonews.wordpress.com)
- Maxing Out (alethonews.wordpress.com)
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From the Archives
By Diana Breti | The Law Connection | 1998
Canadian Concentration Camps
By world standards Canada is a country that respects and protects its citizens’ human rights. That has not always been true, however. Many people are familiar with the story of the internment of Japanese-Canadians in BC during World War II. But not many people are aware that the Japanese were not the only Canadians imprisoned during wartime simply because of their ethnic origin. The history of Canada includes more than one shameful incident in which the Canadian government used the law to violate the civil rights of its own citizens.
The War Measures Act
The War Measures Act was enacted on 22 August 1914, and gave the federal government full authority to do everything deemed necessary “for the security, defence, peace, order and welfare of Canada”. It could be used when the government thought that Canada was about to be invaded or war would be declared, in order to mobilize all segments of society to support the war effort. The Act also gave the federal government sweeping emergency powers that allowed Cabinet to administer the war effort without accountability to Parliament, and without regard to existing legislation. It gave the government additional powers of media censorship, arrest without charge, deportation without trial, and the expropriation, control and disposal of property. This Act was always implemented via an Order in Council, rather than by approval of the democratically elected Parliament. … continue
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This article will examine some of the connections between the US and UK National Security apparatus and the appearance of the anthropogenic global warming (AGW) theory beginning after the accident at Three Mile Island. … continue
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