Congress and the White House are turning a blind eye to the unintended consequences of the Jumpstart Our Business Startups Act (H.R. 3606) by insisting on placing election-year politics over protecting the needs of both small businesses and “Main Street” investors.

The so-called JOBS Act is another example in a long history of good legislative intentions gone bad.

As Harvard Law School Professor John Coates said in his December 14, 2011 testimony before the Senate Banking Committee: “Whether the proposals will in fact increase job growth depends on how intensively they will lower offer costs, how extensively new offerings will take advantage of the new means of raising capital, how much more often fraud can be expected to occur as a result of the changes, how serious the fraud will be, and how much the reduction in information verifiability will be as a result of the changes. Thus, the proposals could not only generate front-page scandals, but reduce the very thing they are being promoted to increase: job growth.”

State securities regulators commend congressional desire to facilitate access to capital for new and small businesses. However, the version of the bill that passed the House is deeply flawed. These problems must be addressed by the Senate.

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