Small businesses throughout the region continue to have an advocate in the nation’s capital, as the U.S. Securities and Exchange Commission (SEC) recently reelected a local lawyer to serve on an advisory committee.
Earlier this month, the SEC’s Small Business Capital Formation Advisory Committee reelected Gregory Yadley, a Tampa-based partner with Shumaker Advisors, to serve as its secretary. Yadley is one of three practicing lawyers on the 15-member committee, which provides formal advice and recommendation to the commission on rules, regulations and policies relating to small businesses.
While places like Chicago and New York are well-represented on the committee – and throughout the Beltway – Yadley is the only person from Florida, much less Tampa Bay.
“I think it’s good,” he said of providing a voice for regional small businesses in Washington, D.C. “Just like securities lawyers, there are people in New York who get most of the representation of public offerings.”
Yadley, the corporate, tax and transactions regional service line leader for Shumaker, then stated his displeasure with Florida-based companies that think getting closer to Wall Street is a prerequisite for a successful public offering.
“Well, they don’t,” he said. “It’s just the more you can democratize the system, and the more people realize they don’t need to go away – the better.”
Yadley used the arts to illustrate his point. He believes teaching the arts is critical for children as it fosters creativity, increases self-esteem and “not everybody’s a great basketball player.” He said it is great when a big orchestra tours the Mahaffey Theater, Straz Center or Ruth Eckerd Hall, but he would like to see a local company provide more opportunities for graduates of area music, dance and theater programs.
Just as local arts graduates should not have to leave the region to find well-paying jobs, Yadley said small businesses should have access to capital close to home.
“And local people – even if they’re not that sophisticated – they may know something about somebody trying to build an apartment complex in Ybor City,” he said. “Because they live here, and they’ve seen how Ybor City has grown.”
A practicing lawyer for over 40 years, Yadley is passionate about helping small businesses access capital. He previously served on the SEC’s Small and Emerging Companies Advisory Committee during its entire time in operation, between 2011 and 2017 and was elected secretary of the small business capital formation committee during its first organizational meeting in May of 2019.
He explained the current committee was born out of Congress passing a law establishing a small business advocate’s office at the SEC. While the unpaid advisors offer recommendations to the SEC, which is under no obligation to heed the advice, the commission does have to report to Congress and state whether they followed the committee’s suggestions.
“Or if they didn’t, explain why they didn’t think our advice was very good,” added Yadley. “That doesn’t give us a lot of power, but it does make them seriously consider what we recommend.”
Yadley said that large companies continue to grow exponentially, and the adage that “one size doesn’t fit all” is especially true with regulations. He said the government adopts policies for two reasons: either to protect the public from bad actors or to impose a social viewpoint for the perceived betterment of humanity.
Regardless of which category the regulations fall under, Yadley said there is often an expense that even the good actors must pay. Rules apply to everyone, which he said can lead to disproportionate penalties.
“When the SEC proposes something, it can really affect the business that has 10 employees a ton worse than a business that has $10 million or a billion dollars in revenue that can afford to hire lawyers and accountants,” he said.
“Our job is sort of … to suggest to the SEC why certain rules – that may be good, either for social policy reasons that they want to implement because they believe in it or to protect the public against fraud – but they need to think about how that will affect the small business, and maybe there’s no real cost-benefit there.”
Yadley said that a virtual economy increased the competition for capital, and small businesses must now compete with companies globally. He noted that crowdfunding was supposed to enable average people to invest small amounts of money into things they were comfortable with while playing a part in a small company’s growth. Unnecessary regulations diminished that capacity, he said.
He blamed Congress rather than the SEC for creating a convoluted apparatus requiring people to use registered brokers, file reports and that restricts how much someone can invest. Through the next four years of his term on the committee, Yadley hopes to help make it easier for honest people to raise money “without all the rigamarole of federal regulations.”
“So, finding money and finding employees – I’d say those are the two biggest things.”