IPO Bill Stinks of Washington Corruption

Short post.  One of my primary arguments on this blog is that the Initial Public Offering (IPO) process is corrupt, flawed, or rigged to award the insiders with the opportunity to accumulate outrageous wealth at the expense of the company, the employees, the customers, and the public (outsiders) investors.  If anything, our government should be legislating laws and creating regulations that clamp down on this legalized fraud.  But, exactly the opposite is now taking place.  Our trustworthy government is pushing through a bill under the banner of job creation that makes IPO’s for companies with revenue under $1 billion LESS REGULATED and LESS TRANSPARENT!  That is correct, I am yelling.  Most of the social networking and media companies (or the DOT COM entities in the 2000 bubble pop) that have gone public in 2011 and 2012 had revenues under $1 billion, and the insiders have become instant billionaires or multi-millionaires.   This bill stinks!

I am now more certain than ever that our government is corrupt and bought by the venture capitalist, investment banks, Wall Street, and people with an immense amount of wealth.  Although this bill endured counter arguments from the SEC and others that have concerns that the bill will open the public investor up to more fraud, the bill is zooming through with support from President Obama and the democrats.  The people behind the bill development were venture capital lobbyists Corrupt Bill.  The lobbyists and government claim this bill will create more jobs, but the real impetus behind the bill is to enable more IPO’s and open the door for insiders to make themselves millionaires and billionaires.  I have already illustrated how the IPO process has been corrupted in that it is more concerned about making the insiders rich as opposed to raising capital for the firm.  But the fact that President Obama, a democrat and man who campaigned on change, grants full support of the bill, illustrates how corrupt our government has become.  Cheers my fellow-man — here is to the über rich taking away greater chunks of the pie.  Below are links to additional articles for your reading pleasure.

Article 1

Article 2

Article 3


About Tincup

Musings on the Human Momentum and thinking about what that means to you and I and future generations.
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4 Responses to IPO Bill Stinks of Washington Corruption

  1. Randel says:

    I do not know enough about the bill, so I take your word. But, this is not surprising.

    The modern day Clinton-Obama Democrats are simply the left hand of the Wall Street monster, and the Republicans, the right hand side of the same Wall Street monster. And, the monster throws us off by running campaigns that put out a lot of smoke on cultural issues as a distraction from the heavy lifting being done for hidden economic interests.

    In economics, the law of one price prevailing is the sign of perfect competition driving the cost down to the minimum profit for everyone to survive, or the sign of total collusion. In political matters the same theorem holds. Both parties support something that rewards Wall Street means: 1) God has spoken and they have total truth and justice figured out and balanced, or 2) you guessed it, a totally corrupt soak-the-middle folks policy.

    Seems like #2 has the better explaining power, and not just on economic subjects.

    • Tincup says:

      Great comment Randel. The articles I provided links to gives summary information on the bill and provides insight into the pros and cons. I am sure there will be many honest businesses with ethical owners and executive teams that will benefit, but so too will the corrupt and fraudulent. An oversight body and bills are supposed to weed out the bad guys and enable the good guys to thrive. Cheers!

  2. Korcy says:

    The facebook Insider Public Offering is now in play. One of my friends says:

    “I tried to buy Facebook stock on the open with a market order, couldn’t get a trade confirmation. When I saw price fluctuating all over the place, I tried to cancel it. Then I couldn’t get a cancellation confirmation. Called my broker. He said that the IPO has overwhelmed Wall Street and no-one was getting trade execution reports. So I may own the stock. I may not. No idea how much it cost me if I do own it. This was an hour ago and I’m still waiting to figure out where I sit.”

    Typical. The poor guy’s gonna get raped.

    • Tincup says:

      I guess the NASDAQ had a major hip cup and your friend and many others were stuck in an information blackout period. Let me know what he/she bought it for if the trade was executed.

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