Senate Session 2012 - 03 - 14 - 18 - 15 - 00 - 18 - 45 - 14

QUORUM CALL: MR. PRESIDENT? MAJORITY LEADER. I ASK UNANIMOUS CONSENT THE QUORUM CALL BE DISPENSED WITH. OBJECTION. I ASK UNANIMOUS CONSENT THAT AT 11:00 A.M. THURSDAY, MARCH 15, THE SENATE PROCEED TO THE CONSIDERATION OF CALENDAR NUMBER 334, H.R. 3606, THE I.P.O. BILL. IS THERE OBJECTION? THE SENATOR FROM OREGON. THANK YOU, MR. PRESIDENT. I RESERVE THE RIGHT TO OBJECT. I'M GOING TO EXPLAIN MY LET ME START BY QUOTING GEORGE W. BUSH. GEORGE W. BUSH SAID FREE MARKETS ARE NOT A JUNGLE IN WHICH ONLY THE UNSCRUPULOUS SURVIVE, OR A FINANCIAL FREE FOR ALL GUIDED ONLY BY GREED. THEN HE CONTINUED, TRICKING AN INVESTOR INTO TAKING A RISK IS THEFT BY ANOTHER NAME. WHAT WE'RE IN THE PROCESS OF CONSIDERING IS TAKING A HOUSE BILL RELATED TO THE PRODUCTION OF CAPITAL FOR SMALL AND EMERGING BUSINESSES AND FLOOR OF THIS SENATE WITHOUT DUE PROCESS BY A SENATE BANKING COMMITTEE. NOW, WE NEED THAT PROCESS BECAUSE THE HOUSE BILL IS FULL OF PROBLEMS FOR INVESTORS THAT WILL CREATE A MARKETPLACE WHERE INVESTORS CAN BE DEEPLY DAMAGED. IT IS OUR RESPONSIBILITY IN THIS BODY TO MAKE SURE THAT AS WE PRODUCE A STREAMLINED SYSTEM FOR SMALL COMPANIES AND START-UP COMPANIES TO ACCESS CAPITAL, WE DON'T CREATE BASICALLY A SCHEME FOR PUMP AND DUMP OPERATORS SEEKING TO DEFRAUD AMERICAN CITIZENS. THAT'S WHY WE NEED DUE CONSIDERATION IN COMMITTEE. NOW, I CAN'T SPEAK TO THE CHALLENGES WITH ALL THE PORTIONS OF THE HOUSE BILL, BUT I CAN SPECIFIC SECTION OF THE HOUSE BILL CALLED CROWD FUNDING BECAUSE I HAVE BEEN WORKING WITH OTHERS, INCLUDING THE DISTINGUISHED PRESIDING SENATOR, SENATOR BENNET FROM COLORADO AND SCOTT BROWN FROM MASSACHUSETTS TO SAY LET'S UTILIZE THIS CROWD FUNDING TOOL BUT DO IT IN AN EFFECTIVE MANNER. NOW, WHAT IS CROWD FUNDING? CROWD FUNDING IS SAYING LET'S TAKE THE POWER OF THE INTERNET, JUST AS WE HAVE PERSON-TO-PERSON LENDING FACILITATED BY THE LET'S TAKE THE POWER OF THE INTERNET AND ENABLE PEOPLE WHO SEE SMALL START-UP COMPANIES WHO ARE SEEKING CAPITAL INVESTMENTS AND GIVE THEM A CHANCE TO PRESENT THEIR IDEAS AND FOR FOLKS TO INVEST IN THOSE COMPANIES. SO THEY MIGHT RECEIVE THOUSANDS OF SMALL INVESTMENTS ENABLING THEM TO TAKE THEIR DREAM FORWARD, TO THE BENEFIT OF THE INVESTOR AND THE BENEFIT OF THE COMPANY. BUT WHAT IS WRONG WITH THE WAY THAT THE HOUSE DRAFTED THIS? I'M GOING TO GIVE SHORT EXAMPLES. ENABLES COMPANIES TO RAISE UP TO A MILLION DOLLARS BY PROVIDING NO FINANCIAL INFORMATION, NO FINANCIAL INFORMATION. THAT IS NOT AN INVESTMENT MARKET THAT IS A SCAM. SECOND, COMPANIES DO NOT HAVE TO INTERMEDIARY. SO, IN OTHER WORDS, YOU OR I TOMORROW COULD START UP A WEB SITE AND SAY COMPANIES SIGN UP AND INVESTORS SIGN UP WITH NO SORTS OF PROTOCOLS FOR THE REGISTERING OF INFORMATION AND NO SYSTEM REQUIRED FOR THE PROTECTIONS OF INVESTORS. SO THAT IS A MAJOR MISTAKE IN THIS LEGISLATION. THIRD, UNDER THE HOUSE BILL, A PERSON COULD SAY HEY, HERE ARE TEN STOCKS, TEN POTENTIAL COMPANIES TO PUT YOUR MONEY THAT ACTION COULD TAKE 100% OF YOUR INCOME, YOUR ANNUAL INCOME IN ONE FELL SO AS WE CREATE THIS NEW, THIS PARTICULARLY INTERESTING MARKETPLACE FULL OF POTENTIAL, WE DON'T WANT IT TO BE A PLACE WHERE NO FINANCIAL INFORMATION OCCURS, NO RULES FOR THE INTERMEDIARIES AND PEOPLE CAN BE TAKEN FOR THEIR WHOLE ANNUAL INCOME IN ONE FELL GLANCE. THAT IS NO WAY TO BUILD THIS WONDERFUL POTENTIAL MARKETPLACE. TO CONTINUE, THE HOUSE BILL LACKS ANY ADVANCE PUBLIC NOTICE, SO A COMPANY CAN PROVIDE TO THE S.E.C. NOTICE ON THE SAME DAY THEY OFFER THEIR STOCK AND UPON GETTING 60% OF THE AMOUNT THEY -- THEY ARE SEEKING, OF THEIR TARGET AMOUNT, THEY CAN WALK AWAY WITH THE INVESTORS' CASH LIKE THAT. SO, IN OTHER WORDS, OFFER IT, NO CHANCE FOR THE S.E.C. TO TAKE A AT IT, COLLECT YOUR MILLION DOLLARS, WALK AWAY, YOU DIDN'T PROVIDE ONE OUNCE OF FINANCIAL FOLKS, IF YOU HAVEN'T SEEN THE MOVIE "THE BOILER ROOM," I ENCOURAGE YOU TO DO SO BECAUSE YOU WILL SEE HOW SCAMS ACTUALLY NOT PERMITTED BY LAW WERE USED TO DEFRAUD EARNEST AMERICAN FAMILIES. IN THIS CASE, WE'RE JUST PAVING THE PATH TO PREDATORY INVESTING SO THAT IS A PROBLEM. THE HOUSE BILL ALLOWS ANONYMOUS STOCK PROMOTERS SO THAT IT ENCOURAGES THE OPPORTUNITY FOR PUMP AND DUMP, WHICH IS A REFERENCE TO ANONYMOUS PROMOTERS SAYING HOW WONDERFUL SOMETHING IS AND NOT IDENTIFYING THEMSELVES AS HAVING A CONNECTION TO THE COMPANY THAT'S OFFERING ITS STOCK. IT DOES NOT ADDRESS THE ISSUE OF YOU KNOW, IF YOU HAD A CHANCE TO OF STARBUCKS, I'M GOING TO START UP A COMPANY AND WOULDN'T IT BE GREAT FOR YOU TO BE ON THE GROUND FLOOR AND YOU SAY YOU BET AND YOU GET 1% OF STARBUCKS STOCK AS A RESULT. WELL, YOU WOULD BE VERY RICH BUT WHAT ABOUT A COMPANY THAT PROCEEDS TO USE A STRATEGY OF DILUTING THE INITIAL INVESTORS SO YOUR INVESTMENT IN THE START-UP IS WORTH NOTHING WHEN THE COMPANY ACTUALLY GETS TRACTION AS A SUCCESSFUL ENTITY? WELL, THAT'S CERTAINLY AN ISSUE. THESE ISSUES HAVE ALL BEEN WRESTLED WITH AND ADDRESSED BY THE BILL THAT SENATOR BENNET, SENATOR BROWN AND MYSELF HAVE PUT TOGETHER. NOW, THE OTHER SECTIONS OF THE PROBLEMS. I WON'T SPEAK TO THOSE PROBLEMS BECAUSE THERE IS OTHER FOLKS WHO ARE MUCH MORE KNOWLEDGEABLE ABOUT IT, SO I WILL STICK TO MY SECTION AND USE IT AS AN ANALOGY OF WHY THIS ENTIRE BILL SHOULD GO THROUGH THE BANKING COMMITTEE. LET ME READ TO YOU A LETTER FROM MATAVE. THEIR SLOGAN IS INVESTMENT FOR ISN'T THAT THE PERFECT SLOGAN FOR CROWD FUNDING? INVESTMENT FOR EVERYONE. THEY ADDRESS THEIR LETTER -- McCONNELL. WE ARE A CROWD FUNDING INTERMEDIARY BASED IN DURHAM, NORTH CAROLINA. WE UNDERSTAND THE SENATE WILL TAKE UP THE HOUSE BILL SHORTLY. WE ARE VERY CONCERNED ABOUT LANGUAGE IN TITLE 3. WHILE WE APPRECIATE THE BROAD EXEMPTION WRITTEN BY THE HOUSE, THE LANGUAGE DOES NOT PROTECT INVESTORS AND PUTS THE CROWD FUNDING INDUSTRY AT RISK OF SIGNIFICANT FRAUD. HOWEVER, MORE RESPONSIBLE LANGUAGE DOES EXIST." AND THEN IT REFERS TO THE BILL THAT THE SENATE HAS BEEN WORKING AND THEN THEY PROCEED TO LIST MANY OF THE FLAWS THAT I JUST SO HERE ARE FOLKS OUT IN THE PRIVATE SECTOR WHO WANT TO SEE A VERY SUCCESSFUL PROCESS, THEY WANT TO BE AN INTERMEDIARY, THEY DON'T WANT TO SEE THIS POTENTIAL INDUSTRY BROUGHT TO A HALT WITH A TERRIBLE REPUTATION BECAUSE IT BECOMES A PREDATORY INDUSTRY. I HAVE ANOTHER LETTER HERE FROM LAUNCHT. THIS LATEST BILL, THE CROWD FUND ACT, THAT'S THE SENATE VERSION, IS IMPORTANT. UNLIKE PREVIOUS BILLS, WE HAVE A SENATE BILL WITH A BIPARTISAN SPONSORSHIP, A BALANCE OF STATE OVERSIGHT, INDUSTRY STANDARD INVESTOR PROTECTIONS, WORKABLE FUNDING CAPS. IT LAYS OUT WHY THIS WORK SHOULD BE IN THIS BILL. AND FINALLY, I WANT TO NOTE THE PERSPECTIVE IN THE "NEW YORK TIMES" EDITORIAL. IT IS TITLED "THEY HAVE VERY SHORT MEMORIES." IT'S SCATHING IN ITS CRITIQUE OF THE PROCESS WE'RE ENGAGED IN. HOUSE REPUBLICANS, SENATE DEMOCRATS AND PRESIDENT OBAMA HAVE FOUND SOMETHING THEY SUPPORT -- A TERRIBLE PACKAGE OF BILLS THAT WOULD UNDO ESSENTIAL INVESTOR PROTECTIONS, REDUCE MARKET TRANSPARENCY AND DISTORT THE OFFICIAL ALLOCATION OF CAPITAL. THEY GO ON, OF COURSE SUPPORTERS DON'T DESCRIBE IT THAT WAY. THEY SAY THE JOBS ACT, WHICH IS THE NAME OF THE HOUSE CAPITAL FORMATION BILL, WOULD REMOVE BURDENSOME REGULATIONS THAT THEY CLAIM HAVE MADE IT TOO DIFFICULT FOR COMPANIES TO RAISE MONEY FROM INVESTORS. NEVER MIND THAT REAMS OF CONGRESSIONAL TESTIMONY, MARKET ANALYSIS AND ACADEMIC RESEARCH HAVE SHOWN THAT MARKET ANALYSIS HAS NOT BEEN AN IMPEDIMENT FOR RAISING CAPITAL. IN FACT, IT'S TOO LITTLE REGULATION THAT HAS BEEN THE ROOT OF ALL RECENT BUBBLES AND THE DOT COM CRASH, ENRON, THE MORTGAGE MELTDOWN. THOSE FREE-FOR-ALLS IMPLODED, CAUSING MASS JOBLESSNESS. WOULDN'T IT HAVE BEEN GREAT IF WHEN THOSE DEREGULATORY EFFORTS THAT DIDN'T DEREGULATE IN A POSITIVE WAY CUTTING OUT UNNECESSARY RED TAPE BUT IN NEGATIVE WAYS WHICH CREATED A WILD WEST MARKETPLACE WITH ALL KINDS OF PREDATORY PRACTICES, WOULDN'T IT BE NICE IF THE SENATE HAD STOOD IN AT THAT MOMENT AND SAID WE ARE THE COOLING SAUCER? I'VE HEARD THAT TERM EVER SINCE I CAME TO THE SENATE. WE'RE THE COOLING SAUCER. WELL, WE COOLED OUR HEELS FOR THREE WEEKS WITHOUT -- WITH THE TRANSPORTATION BILL ON THIS FLOOR, AND WE WEREN'T ABLE TO CONSIDER ONE SINGLE TRANSPORTATION AMENDMENT DURING THAT THREE-WEEK PERIOD. THAT WASN'T COOLING SAUCER. THAT WAS DEEP FREEZE. BUT NOW WE HAVE GONE FROM DEEP FREEZE TO BULLET TRAIN. WE NEED TO SLOW THIS TRAIN DOWN. WE NEED TO HAVE DUE DELIBERATION SO WE CREATE THE SORT OF DEREGULATION THAT IS SO IMPORTANT FOR THE FUTURE GROWTH OF THE UNITED STATES OF AMERICA AND THE FUTURE SUCCESS OF AMERICAN FAMILIES. I'M GOING TO WITHDRAW MY OBJECTION, MR. PRESIDENT, BECAUSE I WANTED TO MAKE A POINT WILL HELP GUIDE OUR DELIBERATIONS OVER THE NEXT COUPLE OF DAYS. IT'S NOT THAT WE SHOULDN'T BE GETTING TO THIS TOPIC. WE CERTAINLY SHOULD, BUT WE NEED TO DO SO IN A MANNER THAT WORKS FOR AMERICAN BUSINESSES, SMALL BUSINESSES, START-UPS AND FAMILIES, AND THE HOUSE BILL DOESN'T DO IT. THANK YOU, MR. PRESIDENT. I WITHDRAW MY OBJECTION. A SENATOR: MR. PRESIDENT. WITHOUT OBJECTION, SO ORDERED. THE MAJORITY LEADER. MR. PRESIDENT, I APPRECIATE THE WORK DONE BY THE PRESIDING OFFICER AND THE JUNIOR SENATOR FROM OREGON ON THIS MOST IMPORTANT PIECE OF LEGISLATION, AND ESPECIALLY THE PROBLEMS THAT THE TWO SENATORS I MENTIONED FEEL IS HAVING WITH THIS LEGISLATION, SO I APPRECIATE VERY MUCH THE OPPORTUNITY I HAVE HAD TO WORK WITH THE TWO OF YOU TODAY AND WE WILL CONTINUE TO DO MR. PRESIDENT, I ASK UNANIMOUS ON THURSDAY, MARCH MARCH 15, AT 1:45 P.M., THE SENATE PROCEED TO EXECUTIVE SESSION TO CONSIDER THE FOLLOWING NOMINATIONS -- CALENDAR NUMBERS 408 AND 461. THAT THERE BE 15 MINUTES FOR FORM. THAT UPON THE USE OR YIELDING BACK OF THE TIME, THE SENATE PROCEED TO VOTE WITH NO INTERVENING ACTION OR DEBATE ON CALENDAR NUMBER 408 AND 461 IN THAT ORDER. MOTIONS TO RECONSIDER BE CONSIDERED MADE AND LAID ON THE TABLE, THERE BEING NO INTERVENING ACTION OR DEBATE AND NO FURTHER MOTIONS BE IN ORDER AND THAT ANY RELATED STATEMENTS BE PRINTED IN THE RECORD, THAT PRESIDENT OBAMA BE IMMEDIATELY NOTIFIED OF THE SENATE'S ACTION, THE SENATE THEN RESUME LEGISLATIVE SESSION. I ASK UNANIMOUS CONSENT THE SENATE NOW MOVE TO S. RES. 396. THE CLERK WILL REPORT. S. RES. 396, SUPPORTING THE GOALS AND IDEALS OF MULTIPLE SCLEROSIS AWARENESS WEEK. IS THERE OBJECTION TO PROCEEDING TO THE WITHOUT OBJECTION. MR. PRESIDENT, I ASK THAT SENATOR AYOTTE BE ADDED AS A COSPONSOR OF THIS LEGISLATION. OBJECTION. I ASK UNANIMOUS CONSENT THE RESOLUTION BE AGREED TO, THE PREAMBLE BE AGREED TO, THE MOTION TO RECONSIDER BE LAID ON THE TABLE, THERE BEING NO INTERVENING ACTION OR DEBATE AND THAT ANY STATEMENTS RELATED -- IN THIS MATTER BE PLACED IN THE RECORD AS IF GIVEN. WITHOUT OBJECTION. I'M TOLD THERE IS A FIRST READING. THE CLERK WILL READ THE TITLE OF THE BILL FOR THE FIRST TIME. S. 2191, A BILL TO AMEND THE AMERICAS WITH DISABILITIES ACT OF 1990, AND SO FORTH. MR. PRESIDENT, I NOW ASK FOR A SECOND READING. THAT'S FOR PURPOSES OF PLACING THE BILL ON THE CALENDAR, BUT I OBJECT UNDER THE PRIVILEGES OF RULE 14 TO MY OWN REQUEST. OBJECTION IS HEARD. THE BILL WILL BE READ FOR A SECOND TIME ON THE NEXT LEGISLATIVE DAY. I ASK UNANIMOUS CONSENT THAT WHEN THE SENATE COMPLETES ITS BUSINESS TONIGHT, THE SENATE ADJOURN UNTIL THURSDAY, MARCH 15, AT 9:30 A.M. FOLLOWING THE PRAYER AND THE PLEDGE, THE JOURNAL OF PROCEEDINGS BE APPROVED TO DATE, MORNING BUSINESS BE DEEMED EXPIRED AND THE TIME FOR THE TWO LEADERS BE RESERVED FOR THEIR USE LATER IN THE DAY. FOLLOWING ANY LEADER REMARKS, THE SENATE PROCEED TO A PERIOD OF MORNING BUSINESS UNTIL 11:00 A.M. WITH SENATORS ALLOWED TO SPEAK FOR UP TO TEN MINUTES EACH WITH THE TIME EQUALLY DIVIDED AND CONTROLLED BETWEEN THE TWO LEADERS OR THEIR DESIGNEES, WITH THE MAJORITY CONTROLLING THE FIRST HALF AND THE REPUBLICANS CONTROLLING THE FOLLOWING THAT MORNING BUSINESS, THE SENATE WILL PROCEED TO CONSIDERATION OF H.R. 3606, THE I.P.O. BILL THAT WE HAVE SPOKEN OF PREVIOUSLY AND AS INDICATED UNDER THE PREVIOUS ORDER. WITHOUT OBJECTION. SO, MR. PRESIDENT, ABOUT 2:00 P.M. TOMORROW, THERE WILL BE TWO VOTES ON CONFIRMATION OF GROH AND FITZGERALD TO BE TRIAL JUDGES IN OUR FEDERAL JUDICIARY. ADDITIONAL VOTES ARE POSSIBLE. IF THERE IS NO FURTHER BUSINESS TO COME BEFORE THE SENATE, I ASK THAT IT ADJOURN UNDER THE PREVIOUS ORDER. THE SENATE STANDS ADJOURNED UNTIL