NEW YORK ( TheStreet) -- It's official: Barack Obama is now an unmitigated disaster when it comes to fighting stock fraud.
If you had any hope that he would represent a change from the dismal record of the Bush administration when it comes to Wall Street and corporate crime, you might as well give up right now.
Nothing Obama has done (or, more frequently, not done) in this administration -- not even his Justice Department's failure to pursue criminal cases against banks for their role in the run-up to the financial crisis -- prepared me for the bombshell he dropped on Thursday, during his much-ballyhooed jobs speech.
As is typical for this administration, he coated his latest surrender to the Republican party in honey-lathered rhetoric. His aides are calling it "crowdfunding." I call it a "green light to stock fraud."During his speech, if you were listening carefully, you might have noticed that Obama said as follows: "We're also planning to cut away the red tape that prevents too many rapidly growing start-up companies from raising capital and going public." Aneesh Chopra and Tom Kalil -- respectively, the U.S. Chief Technology Officer and Deputy Director for Policy at the Office of Science and Technology Policy -- translated that soaring but meaningless rhetoric into nitty-gritty in a blog post on the White House Web site that evening. "As part of the President's Startup America initiative," they wrote, "the Administration will work to unlock ... capital through smart regulatory changes that are consistent with investor protection." Chopra and Kalil went on to say that "this means reducing the disproportionately high costs that smaller companies face when going public, as well as raising the cap on 'mini' public offerings (Regulation A) from $5 million to $50 million. It also means responsibly allowing startups to raise money through 'crowdfunding' -- gathering many small-dollar investments that add up to as much as $1 million." David Schweiker, a Republican congressman from Arizona, immediately saw this for what it was: an undisguised victory for the GOP. Obama was adopting Republican legislation that passed the House Financial Services committee in June. "Obama Backs GOP Plan to Exempt Some Companies from SEC Registration," a headline in his press release crowed.