Mr. DURBIN. Thank you. I will try to fill that time with something interesting. The United States has the best markets in the world. Because of strong regulation and oversight by the Securities and Exchange Commission and other agencies, our markets are transparent and investors get accurate detailed information. One hundred million Americans depend on the strong regulated markets when they are making their savings for retirement or college. This is a creation that began back after the Great Depression, when Franklin Roosevelt said we needed to establish the appropriate regulatory agencies to set the economy on the right track and keep it there.
Strong oversight has helped pension fund managers who count on safety and transparency so they can provide pension benefits to millions of American retirees, and investors from around the world bring their money here because of our investor protections. Yet the Senate is considering a House-passed capital formation bill that rolls back the very protections that make our markets the best in the world.
Supporters of this bill claim investors will jump at the opportunity to invest in a company as soon as we reduce disclosure, auditing, and accounting standards. They say this is a perfect way to create jobs. But why should investors choose to invest in companies under conditions that do less to protect their money? Why should investors who were burned during the dot-com crash put more capital in companies that are exempt from the same rules we put in place to ensure it would never happen again? Why would investors who were left with nothing after the financial crisis because of risky behavior by executives with golden parachutes find companies exempt from compensation standards more attractive? The answer is they will not. The ones who do will be more exposed to deceit and fraud. The result will not be more jobs, it will be less transparency, less accountability. Professor John Coats of Harvard Law School agrees. Here is what he said: ``[T]he proposals could not only generate front-page scandals, but reduce the very thing they are being promoted to increase: job growth.'' Listen to what SEC Chief Accountant Lynn Turner said: The proposed legislation is a dangerous and risky experiment with US capital markets. ..... I do not believe it will add jobs but may certainly result in investor losses.
The House-passed bill, as written, will not create jobs, but let me tell you what it will do. It will exempt firms with more than $1 billion in revenue--that is 90 percent of the newly public companies--more than $1 billion of annual revenue exempted from the standards that help ensure audits based on facts, not on who is managing the auditor's contract. These are the same internal controls we just adopted after Enron, after we were burned there, after investors lost their money, after pension funds lost their investment, after people lost their jobs. We set up standards and said: Let it never happen again.
In this euphoria, we are going to repeal the Enron standards for these companies. This bill would allow companies to use billboards and cold calls to lure unsophisticated investors with the promise of making a quick buck investing in new companies.
According to the New York Times, it will allow anyone with an idea to post that idea online and raise $1 million without ever providing financial statements. This is a scam. How many times have we picked up our cell phones to see there is a Nigerian opportunity out there? Be prepared after this bill passes. They will not be from Nigeria; they may be from next door. We are giving them the opportunity to ask people all across America for their hard-earned savings on investments that are not backed with financial statements.
Last Friday, SEC Commissioner Aguilar joined the Chairman of the SEC Mary Schapiro in raising concerns about this House-passed bill. Is that [Page: S1970] not fair warning that we ought to least have a hearing on this bill before it passes? I ask unanimous consent to have Commissioner Aguilar's statement printed in the Record.
There being no objection, the material was ordered to be printed in the RECORD, as follows: