Political Quotes

“the Collins-Cleland-Gregg legislation is the product of hearings of the Permanent Subcommittee on Investigations which I chair. We first started looking at this issue in 1997 and held our first hearing in September of that year. Those hearings revealed that microcap securities fraud is pervasive, so much so that regulators estimated that it cost investors $6 billion in losses annually, according to an article in the Wall Street Journal. The damage from these microcap scams, however, is not confined to investor losses. They also damage the reputation of legitimate small companies and limit their ability to raise capital through the securities markets. Ironically, the strong performance of the securities markets over the past several years has provided an ideal breeding ground for these microcap scams as more and more Americans invest in stocks. In fact, according to the SEC, in 1980, only 1 in 18 individual Americans participated in the securities markets. Today, 1 in 3 Americans participate in the securities markets. There has been a tremendous growth in more and more American households investing in equities. In a typical microcap fraud, an unscrupulous broker, often acting through an intermediary, purchases large blocks of shares in a small company with dubious business and financial prospects.”