buried the IPO market for years," SEC Commissioner Luis A. Aguilar observes in a statement posted to the agency's website on Friday. "Investors won't return to the IPO market, if they don't believe they can trust it."
Making it more difficult to find reliable information about an up-and-coming company won't encourage investors to invest in capital markets favorable to start-ups, according to University of Florida Finance Professor Jay Ritter.
"In thinking about the bills, one should keep in mind that the law of unintended consequences will never be repealed," he said at a Congressional hearing [PDF] earlier this month.
"It is possible that, by making it easier to raise money privately, creating some liquidity without being public, restricting the information that stockholders have access to, restricting the ability of public market shareholders to constrain managers after investors contribute capital, and driving out independent research, the net effects of these bills might be to reduce capital formation and/or the number of small EGC IPOs," he added.