> The securities that the defendants and their co-conspirators sought to manipulate were issued by small companies, were thinly traded, and typically traded at less than $2 per share. These publicly traded shell companies frequently had few, if any, actual assets or actual business operations. While on paper the defendants and their co-conspirators had no connection to these companies, in reality they exercised substantial control, including installing management at the companies, financing the companies’ operations, and funding payments for attorneys in order to prepare public filings with OTC Markets Group, Inc. and the Securities and Exchange Commission (the “SEC”). In order to attract investor interest, the defendants and their co-conspirators, at times, caused private businesses to be merged or “vended” into the publicly traded shell companies. The private businesses were often in industries likely to attract the investing public’s interest
I could have sworn I read a NYT article about tracking strange price fluctuations and these shell companies who at times would buy and absorb other companies… some of these shell companies were very shadowy/ hard to get information on. A few seemed to have random people listed as CEO (real people who had other jobs, like a gym teacher at a high school), and they refused to respond to questions from NYT.
_Yawn_. They caught a few small-fish bad guys. While I'm glad they're going down (from my limited information on the subject) this pales in comparison to the active harm the SEC perpetrates against the average joe on a daily basis.
I should be able to invest in _whatever I want_ no matter my net worth. It's my goddamn money and they have no right, after taking almost half of it, to then tell me that I can't spend it as I please. The worst part is I'm _paying_ (via taxes) for them to then tell me what I can't do.
Nah. It's in society's interest to keep confidence in the markets up, because that's how you maximize total resources available for investment and economic growth. That confidence requires vigorous protection of investors, including the ones that think they're too smart to need protection.
It's no coincidence that the US has strong enforcement and is also a top international destination for investment. If anything the SEC and the CFTC should be more vigorous, and I'm happy to pay to support them.
Society does not need higher and higher markets. In many ways it is the illusion of economic growth and treated as such. The brain and resource drain to financialization of everything from industries that actually produce something will be looked back upon poorly in the future.
letting ordinary people invest in what they please does generate alot of harm for individuals who are indeed too stupid to spend their money wisely. But it also oppresses that class who didn't happen into a $1M.
I'm a college educated, 26 year old programmer. I don't have a million in assets yet and it effects my ability to trade on margin and invest in private or OTC offerings, run an arbitrage bot and a million other things. Using a million dollars in assets as your rationale for whether someone is smart enough to do those things is classist.
You can spend $187 to take the Series 65 exam to prove that you know what you're doing and become an accredited investor that way - unlike the Series 7, you do not need your employer to sponsor you.
Wow, didn't know about this. Thanks! Slightly peaved once i read over the outline of the test tho.... linked below but series 65 assumes and prepares me to give advice on these matters. It includes estate planning and a whole slew of sections on the ethics of giving advice.
Why do i have to be qualified to give advice to unlock my own life first? And how can i just pay my way out of knowing all of this if i inhereted a $1M?
I think the theory with having that much money is that either you have the knowledge or you can afford to hire someone who has it.
It's true that the Series 65 is more than one would need for solo investing. But the alternative was for them to come up with some sort of new test for the very small number of people who want to get into opaque, illiquid, high-risk investments. This seems like a pretty reasonable compromise.
I'm fine with a lot of the established players paying deeply. I think our economy is egregiously over-financialized, devoting incredible amounts of time and brainpower to zero- and negative-sum activity.
However, that in no way suggests I would be in favor of making it easier for grifters to fleece the rubes. Indeed, I favor strongly regulated markets partly because that reduces the rewards for parasitic activity.
It's definitely not nonsense. Strong markets require strong regulation.
As an example, I used to write software for a company that traded derivatives. The markets we were on all had extremely strong internal regulation. Everybody who traded knew not to fuck with the exchanges. And that's what made them great places to trade: you could trust the outcomes.
It's very similar with investing. Investors are putting in money in exchange for a piece of something with clear risks. The murkier the risks get, the harder it is to get investment money. If, e.g., half of NYSE stocks were scams, investors would put in a lot less money, because their risks would go up, and that risk would apply to every stock in the exchange, because bad actors would of course try to make scams look like good companies.
So it really isn't about you or your daddy issues. It's in the NYSE's interests to keep scammers stocks off their exchange. It's also in the interest of most people who list or trade on that exchange. The same pattern applies more broadly to national markets as well.
