4 ms·
No. There are rules against that, intended to protect small fish against being ripped off by strangers. Small fish are assumed able to judge their family and f
by Arnt 9y ago
No.
There are rules against that, intended to protect small fish against being ripped off by strangers. Small fish are assumed able to judge their family and friends, and big fish to be able to take care of themselves.
- varjag 9y agoThanks. Figures that's the reason for public companies and stock exchanges in the first place. However where lies the boundary? I assume all institutional middlemen are prohibited? You mention family and friends. While family is a legal category, friends is extremely vague. Would a sale between unrelated persons be regulated? For example between a stranger and a confirmed ex-employee with stock? Does one have to be an "accredited individual" for any outside stock transaction?
- Arnt 9y agoYes, exhanges is where you can buy companies that meet certain criteria, such as publishing earnings forecasts and many other things to the public and not to anyone ahead of time. Devices to protect small fish against being ripped off by company insiders. A sale isn't forbidden, but soliciting is. SpaceX cannot solicit the general public. If they can explain that they reached you because you're Elon's former secretary's cousin and you met Elon at a birthday party, they may choose to include you in a financing round. Otherwise, they'll just say no, because you're not worth the risk/cost of having to answer pointed questions from the regulator. (The regulator might not punish them, but just having to answer questions quickly eats up expensive lawyer hours. And then there's the whole question of who you are. If you're a shareholder you're entitled to answers, so pedants owning a single share can be a real bother.)