Courtesy of Pam Martens.
Outgoing Chair of the SEC, Mary Schapiro, Who Plans to Step Down December 14, 2012
This past Friday, the Securities and Exchange Commission (SEC) brought an enforcement action against an alleged Miami fraudster, Claudio Osorio, and his accountant, Craig Toll, whom it charged with swindling $16.8 million from five duped investors based on a series of outrageous lies about their startup company. Now, thanks to Congress and its second worst financial idea since the repeal of the Glass-Steagall Act in 1999, things just got a lot easier for stock charlatans.
In April, President Obama signed into law the Jumpstart Our Business Startups Act (JOBS Act). The title of the legislation tells you all you really need to know: this Congress will pass the most horrific piece of anti-consumer, anti-investor legislation if it has a flag-waving title and enough special interest money backing it.
The goal of the legislation is in keeping with the grotesque mindset of Washington: in the midst of the lingering effects of the worst economic crisis since the Great Depression — caused by the deregulation of Wall Street; the answer is to deregulate Wall Street further.
Under the new legislation, men like Osorio would be able to engage in private placements of stock offerings via general solicitations to the public, such as telemarketing, and through advertising via media and the internet. In other words, instead of defrauding just five investors, as the SEC charged in the Osorio case, because legislation barred him from being able to advertise broadly to potential investors, stock charlatans will now be able to jumpstart their frauds and reach thousands of investors.
Barbara Roper, Director of Investor Protection at the Consumer Federation of America, provided the backdrop to this insanity in an October public comment letter to the SEC:
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