This is a different argument than "90% of startups—actual companies operated in a more-or-less-competent fashion—fail, and this is a higher risk than we allow unsophisticated investors to tolerate."
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I have a certain degree of respect for that argument, but to the extent I buy it, it suggests a number of immediate rationalizations of regulations surrounding retail investor participation in the core financial markets.
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They would probably include a) accredited investor or equivalent requirements for options trading rather than the simple self-certification required currently, b) restrictions on broker marketing, and probably c) disallow either all or a subset of single company securities.
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you pretty much just described ICOs 2016-2018 in which hundreds of them used the same language and use-cases.
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Yep. The optimized predation machine there—the fact that there was an entire differentiated industry to create a supply chain for investment scams—causes me to be much more cool about abolishing the accredited investor rule than I was previously.
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I’d like to see a prospectus posted detailing past performance (in simple terms) at every quickie mart selling lottery tickets in the inner city.
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It's possible that this rule has created such a scenario - a middle class prohibited from accessing the same investments as the rich is a middle class that doesn't understand risk.
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I’m not sure what you are arguing? Boiler rooms selling penny stocks to grandma is a stereotype based in fact. There are other SEC modalities but losing those protections seems bad.
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The market for information is very different from when that rule came into effect. It should be replaced by a rule that states that shareholders are liable for any dishonest statements in a company's prospectus. Knowing or unknowing. It would take the puffery out.
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