Hello again, View fans. Now on with your afternoon links.
SEC unveils crowdfunding proposal for dummies
The Securities and Exchange Commission’s crowd-funding proposal is out. A mere 585 pages. Great news for small businesses looking for a quick, honest way to raise capital. Even better news for crooks itching to fleece your gullible relatives. The SEC also showed what it thinks about the value of an independent audit opinion these days: none will be required for companies looking to raise less than $500,000. (A well-deserved slap for the accounting profession.) Be careful out there, folks. The people trying to raise money on these deals generally are the ones who can’t raise it from anybody else.
No worries, Jamie Dimon, you’ll be just fine
Written with obvious regret by Jesse Eisinger of ProPublica, who offers the JPMorgan Chase CEO this bit of comfort: “I hate to be the bearer of good news for Jamie Dimon, but everything is going to work out O.K. How do I know? Two words: Lloyd Blankfein. Will Rogers said it takes a lifetime to build a good reputation and only a minute to lose it. Hardly. In the case of Mr. Blankfein, chairman and chief executive of Goldman Sachs, it took other people’s lifetimes to build the reputation he inherited. Then, he oversaw its destruction. It took just five years to build his own name back up. Not so bad.”
Jury rules against Bank of America
After a four-week trial the bank was found liable for defrauding Fannie Mae and Freddie Mac by selling them thousands of faulty loans. Justice Department lawyers have requested as much as $848 million of damages in the civil case. A nice win for the government, but just a flesh wound for Bank of America.
At least these companies can’t use crowdfunding to raise money from U.S. investors
Good thing the SEC decided only U.S. companies can use crowdfunding under its proposal. Paul Gillis, an American professor in Beijing who writes the China Accounting Blog, has a piece today about some new Chinese initial public offerings and the companies’ wacky “variable interest entity” structures. Too hard to explain the details here, but the short story is that the companies are losing money and seem completely unable to explain how they plan to use their IPO proceeds: “This, of course, is a huge risk factor. If companies cannot use the IPO proceeds to fund losses in the VIE, how is the business going to survive?” Good question, huh?
Why Warren Buffett didn't buy the Washington Post
The grand dame of Fortune magazine, who is a longtime Buffett friend, explains why he didn’t buy the newspaper, even though Berkshire Hathaway is its parent company’s largest shareholder: “Buffett said that for him to have bought it for Berkshire would have saddled the next CEO (whoever that might be, taking office at an unknown date) with a metro newspaper that he or she possibly wouldn't want. And to buy it personally, he added, would have at his death burdened his three children -- Susie, Howard, and Peter Buffett -- with the same kind of complex considerations.”
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)