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ASA CEO Iacovella Discusses Small Business Capital Formation and Defends Capitalism at U.S. Chamber

Iacovella joined a panel of other financial trade CEOs and defended the capitalist system that has improved the lives of generations of Americans.

WASHINGTON – American Securities Association (ASA) CEO Chris Iacovella appeared this week at the U.S. Chamber of Commerce’s 13th Annual Capital Markets Summit to discuss the importance of small business capital formation and the need to protect retail investors by tailoring the Consolidated Audit Trail to halt collection of retail investor personally identifiable information. Iacovella joined a panel of other financial trade CEOs and defended the capitalist system that has improved the lives of generations of Americans. To watch the full archived video of the panel discussion—starting at 2:18:00—click here.

On Small Business Capital Formation:

“Chair Clayton has been systematic in his approach to helping small businesses, he has set up the bowling pins and is ready to knock them down in support of a pro-growth capital formation agenda. People want small businesses to continue to grow and have access to capital at an early stage in their growth cycle. It’s not good for America and not good for the real economy when companies stay private until they are $10 billion companies. Individual investors, mom and pop 401(k) retirees and savers only get to participate in the growth and wealth creation that happens when companies go public early. That’s what we are trying to do, that’s the initiative, that’s the opportunity, and that’s why it’s so important.”

“The ideas of the engineer, the scientist, and the disruptor are the sparks that fuel the entrepreneurial fire that is necessary for this economy to continue to grow. Those folks need to have an outlet so they can be able to go public without having to endure attacks on their corporation by politicians and by regulators, and be able to access the capital markets at a very early stage. That promotes wealth creation, not just in in their communities with other businesses popping-up, but it also promotes wealth creation nationwide, because anybody who wants to can participate in the growth of those companies at an early stage. This doesn’t happen when companies like Uber and Lyft go public when they are $10 billion companies and all that wealth is consolidated in one corner of the country. It’s extremely important to the real economy for us to get this right and to do something to streamline regulation for small businesses.”

On the SEC’s Consolidated Audit Trail:

“On Congress passing data privacy legislation, I don’t think it will be comprehensive, but I do think you might be able to see some rifle shots. We have the Consolidated Audit Trail and the ridiculous idea of collecting the personally identifiable information of America’s retail  investors. There is bi-partisan agreement that we must not needlessly subject America’s investors to cyber risks.”

In Defense of Capitalism:

“Politicians are proposing policies that would use public companies to implement a central-planning agenda in this country. You have an idea where public companies become so big they have to be chartered. That means regulators and politicians could jawbone them to implement a political agenda. We have seen it already where Members of Congress are saying to financial services CEOs why did you finance oil and gas projects, why did you finance pipelines, why are you doing business with gun manufacturers. That is a huge problem and the biggest concern for me is they have gone a step further and are now trying to replace the business judgement of corporate boards with their own by saying you have too much cash on your balance sheet, and you can’t use that cash to benefit your shareholders. You can’t increase returns for investors in the form of share buybacks, or you can’t give them dividends. These policies are an absolute attack on America as it is, and frankly, it’s a nothing more than a public confiscation of private wealth, and I think it is something we need to be very concerned about.”

“If you were to take away the ability of corporations to give back their excess capital to shareholders who bought shares of that company for the benefit of getting capital appreciation and dividend income and use it to artificially inflate worker wages (which are set by the market), or use it for capital investment that’s unproductive, then ultimately, what you will end up doing is degrading the value of the company, cause the shares to lose value, and people are going to get fired. These are not good solutions, they are not well thought-out.”

To watch the full archived video of the panel discussion—starting at 2:18:00—click here.


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