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SEC Modernizes the Accredited Investor Definition

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Re: SEC Modernizes the Accredited Investor Definition

#181

Post by stickfigure »

jpeg_hero wrote: post #157
stickfigure wrote: post #95

Earlier quoted context omitted.

Seems like there's at least one "third option". The rights of minority shareholders don't have to be as minimal as they are. How about "anyone who owns stock is entitled to look at the books?"

Shhhhhh. "Specific statutes in the California Corporations Code provide shareholders the right to inspect bylaws, accounting books, records, minutes and financial statements. The California Corporations Code allows the court to enforce these rights."

Does that apply to Delaware corporations headquartered in California?

Re: SEC Modernizes the Accredited Investor Definition

#182

Post by renewiltord »

cryptica wrote: post #169
renewiltord wrote: post #163

Earlier quoted context omitted.

The "peasants" don't have to buy anything, dude. I know friends with all their money in bonds, metals, and Vanguard. No one's making you go by TSLA 4500 calls expiring this Friday.

They don't have to, but they will, now that we finally allow them... At this very convenient time.

Let them do so, then. May we all be free men, acting for ourselves, not slave to the whims of states.

Re: SEC Modernizes the Accredited Investor Definition

#183

Post by jpeg_hero »

stickfigure wrote: post #181
jpeg_hero wrote: post #157

Earlier quoted context omitted.

Shhhhhh. "Specific statutes in the California Corporations Code provide shareholders the right to inspect bylaws, accounting books, records, minutes and financial statements. The California Corporations Code allows the court to enforce these rights."

Does that apply to Delaware corporations headquartered in California?

no.

Re: SEC Modernizes the Accredited Investor Definition

#184

Post by tathougies »

scott00 wrote: post #88
tathougies wrote: post #25

Earlier quoted context omitted.

The average person can now take the Series 65 exam for $60 or so and, if they pass, become an accredited investor. This is a huge change. Taking the wealth requirement from 1 million dollars to $60. EDIT: It's not $60, but $175, still a far cry from a million.

This is likely not true. You can't just sign up for FINRA exams as an individual; an eligible entity (broker-dealer or investment advisor) has to sign you up. And even if you have passed the relevant exam recently enough, you're not considered licensed unless you're working for an eligible entity who has submitted the appropriate paperwork to claim you as a registered representative. The easiest path this opens for s…

You don't need a sponsor for Series 65. In my home state of Oregon, you have to pass the exam, and you have to be 'affiliated with a registered investment advising business', but this business can be owned by you. Which means that, if you take the exam, and register a corporation owned by you with the state (and pay a nominal tax of a few hundred dollars), post a 10k refundable bond, and maintain books properly, you can invest in previously inaccessible vehicles.

Is this work... yes. But the capital requirements are so low that it broadens access to many more people. I'd expect companies to start forming around getting people their Series 65 and allowing them to affiliate themselves with the business for a fee. This is still significantly better in terms of accessibility than the $1million wealth requirement or income >$200k.

Re: SEC Modernizes the Accredited Investor Definition

#185

Post by tathougies »

nkohari wrote: post #83
tathougies wrote: post #25

Earlier quoted context omitted.

The average person can now take the Series 65 exam for $60 or so and, if they pass, become an accredited investor. This is a huge change. Taking the wealth requirement from 1 million dollars to $60. EDIT: It's not $60, but $175, still a far cry from a million.

The series 65 is intended for people who want to manage other people's money. You should still be able to invest your own money as you wish.

I completely agree with you and would like to see accredited investors go away as a concept. However, this new policy is strictly better than what we had, so it deserves praise.

Re: SEC Modernizes the Accredited Investor Definition

#186

Post by [deleted] »

colordrops wrote: post #80
mywittyname wrote: post #62

Earlier quoted context omitted.

There's a strong financial incentive for the market to engage in fraudulent activities against investors. And the smaller the investor, the greater then incentive. Public companies have regulations that help prevent such fraud by requiring things such as audits by third party accounting firms, and regulating how these audits may be performed. Such regulations came about specifically as the result of fraud committed b…

It's a matter of principle though. You don't restrict the freedom of individuals to protect them from other individuals that are bad actors. You go hard and strong after the bad actors. What other examples of laws outside of finance can you cite where individuals are restricted in order to protect them from other bad actors? It's absurd and not in the scope of what government should be doing.

[deleted]

Re: SEC Modernizes the Accredited Investor Definition

#187

Post by tathougies »

refurb wrote: post #29
tboyd47 wrote: post #22

The accredited investor restriction on private equity seems like the most anti-free-market law I've ever heard of. You're not allowed to put your own money into a business unless the government deems you Smart Enough (c) (tm) to do so. If the vast majority of citizens here are not smart enough to invest our own money, then what is all the higher education for? This change sounds like a good one but there's not enough…

like the most anti-free-market law I've ever heard of Do you know why the SEC created these rules? If you understand the history it makes a lot of sense.

No it doesn't really. People should be allowed to fail. The response when someone loses all their money due to a business failing should be to have a social safety net, not to prevent them from ever having been able to invest their money in the first place.

Re: SEC Modernizes the Accredited Investor Definition

#189

Post by [deleted] »

colordrops wrote: post #179
alasdair_ wrote: post #103

Earlier quoted context omitted.

>What other examples of laws outside of finance can you cite where individuals are restricted in order to protect them from other bad actors? Pretty much any consumer safety or mandatory licensing law. Even something as simple as buying a beer - we insist that legal adults are not allowed to buy a beer until they are older. We insist that adults must be over 21 to buy a handgun in many states, or that (in other state…

Every one of your examples are of the case of protecting the individual from hurting themselves or others. This is quite different from the question, which is to cite a law that restricts someone in order to protect them from others.

[deleted]

Re: SEC Modernizes the Accredited Investor Definition

#190

Post by cryptica »

SomewhatLikely wrote: post #174
cryptica wrote: post #168

Earlier quoted context omitted.

Of course, to people outside of the US, what was going on in the US was obvious. They should just get rid of these socialist laws which are supposedly designed to protect your comrades but which actually serve the interests of a small number of politically connected elite by hindering mobility... Let's face it, what you have in the US is textbook communism. It's ironic that Russia today is more capitalist than the US…

Regulation is tantamount to communism and socialism? Ownership is still private in the US but has rules on what can be done. Russia has state ownership in many of that country's companies.

Regulations designed to protect people from themselves are inherently socialist... The fact that these regulations actually end up creating a moat around the elites (by locking regular people out of opportunities) is inherently communist.

This is exactly what the Soviet political elites did to keep living the good life at the expense of their poor citizens; all under the pretext of protecting people from themselves.

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