Totally agree - this feel like "security theatre" at the airport - except it's SEC theatre. The SEC has largely failed in it's mission to prevent things like t

Totally agree - this feel like "security theatre" at the airport - except it's SEC theatre. The SEC has largely failed in it's mission to prevent things like this happening in the first place - going back and arguing over whether it was technically fraud or not with the benefit of 20/20 hindsight isn't going to prevent stuff like this from happening again. People get sold bad investments all the time - the onus is on you as the buyer to make good decisions and do your research. If you feel it's fraud, the courts are available to you as a private party. The SEC doesn't add any benefit to this equation that I can see. It does perhaps add one negative to the equation by encouraging people to take these investments "on faith" because they believe (incorrectly) that the SEC is effective at watching out for them.