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SEC proposes changes to “accredited investor” definition

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Re: SEC proposes changes to “accredited investor” definition

#121

Post by alasdair_ »

jrs95 wrote: post #107
gumby wrote: post #97

Earlier quoted context omitted.

> Of course, would love to see them go even further and let just anyone invest Are you aware of the history of the accredited investor rules? When just anyone could invest there was too much opportunity for swindlers .. a problem that goes back the Mississippi company back in 1719. Televangelists defrauding poor people is bad enough; we don’t need wall atreet bucket shops doing the same.

If anyone in power actually gave a shit about that why do we still have lotteries and casinos?

Because a lot of the money from lotteries and casinos goes to the people (or at least controlled by the people) in power?

Contrast that with small angel investments from “widows and orphans” - that money generally doesn’t end up controlled by the government.

Re: SEC proposes changes to “accredited investor” definition

#122

Post by alasdair_ »

nradov wrote: post #104
kenneth wrote: post #20

Welcome changes to the accredited investor rules. Of course, would love to see them go even further and let just anyone invest — but this is already a step in the right direction. In all my dealings with the SEC (from working at multiple regulated investment platforms, AngelList and Republic, and now as a VC), it's become clear to me that they're extremely pragmatic and want to support innovation and create a level p…

Anyone already can invest through the simple expedient of lying about their assets and income. I know people who did this in order to invest in pre-IPO stock. Some financial services companies do minimal verification, and even if an unaccredited investor gets caught there's no real punishment. (I am not recommending breaking the law.)

Exactly.

And if you lie, you (righly) don’t get the default protections available to small investors.

Re: SEC proposes changes to “accredited investor” definition

#123

Post by alasdair_ »

AdamN wrote: post #58
baybal2 wrote: post #39

Earlier quoted context omitted.

> it's become clear to me that they're extremely pragmatic and want to support innovation and create a level playing field for everyone USA has by far world's most byzantine and bizarre securities laws. To me, this doesn't seem to be going well along that statement.

Which countries have less bizarre and byzantine securities laws?

Somalia and Sealand.

Re: SEC proposes changes to “accredited investor” definition

#124

Post by toast0 »

ibeckermayer wrote: post #108
gumby wrote: post #97

Earlier quoted context omitted.

> Of course, would love to see them go even further and let just anyone invest Are you aware of the history of the accredited investor rules? When just anyone could invest there was too much opportunity for swindlers .. a problem that goes back the Mississippi company back in 1719. Televangelists defrauding poor people is bad enough; we don’t need wall atreet bucket shops doing the same.

Fraud is already illegal, and if it's happening then the defrauded parties should take the swindlers to court and prove it, and the justice system should punish them. The fact that some people might get swindled is not an argument for why I shouldn't be allowed to invest my money how I see fit. Just like the the fact that somebody might sell a defective toothbrush doesn't justify forcing me to get the approval of som…

> I shouldn't be allowed to invest my money how I see fit.

To my knowledge, the investees only need to ask you if you're an accredited investor, and tell you what that means. They don't need to actually verify that you meet the requirements. If you'ld like to invest in shady things, go right ahead.

Re: SEC proposes changes to “accredited investor” definition

#125

Post by JDiculous »

gumby wrote: post #97
kenneth wrote: post #20

Welcome changes to the accredited investor rules. Of course, would love to see them go even further and let just anyone invest — but this is already a step in the right direction. In all my dealings with the SEC (from working at multiple regulated investment platforms, AngelList and Republic, and now as a VC), it's become clear to me that they're extremely pragmatic and want to support innovation and create a level p…

> Of course, would love to see them go even further and let just anyone invest Are you aware of the history of the accredited investor rules? When just anyone could invest there was too much opportunity for swindlers .. a problem that goes back the Mississippi company back in 1719. Televangelists defrauding poor people is bad enough; we don’t need wall atreet bucket shops doing the same.

While we're at it why don't we ban poor people from trading stocks because they're too stupid to manage their own money? /s

Funny how these rules don't apply to gambling and lottery tickets.

Re: SEC proposes changes to “accredited investor” definition

#126

Post by CamperBob2 »

JDiculous wrote: post #125
gumby wrote: post #97

Earlier quoted context omitted.

> Of course, would love to see them go even further and let just anyone invest Are you aware of the history of the accredited investor rules? When just anyone could invest there was too much opportunity for swindlers .. a problem that goes back the Mississippi company back in 1719. Televangelists defrauding poor people is bad enough; we don’t need wall atreet bucket shops doing the same.

While we're at it why don't we ban poor people from trading stocks because they're too stupid to manage their own money? /s Funny how these rules don't apply to gambling and lottery tickets.

Both of those things are far more strictly regulated than conventional investments are.

Re: SEC proposes changes to “accredited investor” definition

#127

Post by conanbatt »

CamperBob2 wrote: post #126
JDiculous wrote: post #125

Earlier quoted context omitted.

While we're at it why don't we ban poor people from trading stocks because they're too stupid to manage their own money? /s Funny how these rules don't apply to gambling and lottery tickets.

Both of those things are far more strictly regulated than conventional investments are.

They are used by the state to raise revenue!

Re: SEC proposes changes to “accredited investor” definition

#128

Post by qtplatypus »

briandear wrote: post #113
bsder wrote: post #62

Earlier quoted context omitted.

> The stated mission of the SEC is "to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation." The problem with small investors is that it is really damn hard to bring a CEO doing obviously fraudulent things to heel. It takes a significant fraction of a million dollars to bring a successful lawsuit--and what you get in the end isn't worth much. The SEC needs to be much mor…

> it is really damn hard to bring a CEO doing obviously fraudulent things to heel. If it’s “obviously” fraudulent, why isn’t law enforcement involved? No lawsuit required since fraud is a crime.

Because "obvious" might not rise to the level of "beyond reasonable doubt".

Re: SEC proposes changes to “accredited investor” definition

#129

Post by conanbatt »

gruez wrote: post #30
conanbatt wrote: post #5

Earlier quoted context omitted.

A walk down r/WallStreetBets shows you that if there is an argument about a gov agency protecting unsophisticated investors, its failing spectacularly.

I think you're misunderstanding the threat model. It's designed to protect unsophisticated investors from fraudsters, not from the investors themselves.

I don't think this is true. A clear example is startup stock-options. It is legal for the company to give you that as compensation, you historically get taxed for that compensation, it is legally mandated to get appraisal by a third-party company, but it is generally illegal to offer them for sale in the public.

Re: SEC proposes changes to “accredited investor” definition

#130

Post by kosievdmerwe »

alasdair_ wrote: post #120
ibeckermayer wrote: post #108

Earlier quoted context omitted.

Fraud is already illegal, and if it's happening then the defrauded parties should take the swindlers to court and prove it, and the justice system should punish them. The fact that some people might get swindled is not an argument for why I shouldn't be allowed to invest my money how I see fit. Just like the the fact that somebody might sell a defective toothbrush doesn't justify forcing me to get the approval of som…

> Fraud is already illegal, and if it's happening then the defrauded parties should take the swindlers to court and prove it, and the justice system should punish them. Non-accredited investors, by definition, don’t have a lot of money. If that money is stolen from them via fraud, where does the money to fund the lawsuit come from? What if the total potential judgement is less than the cost of the court case? Regulat…

Even if you have the money to push the civil suit. There might not be money to recover!

By definition the people you could rightfully sue are misusing the money and likely living it large with it.

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