4 ms·

Two words that perfectly describe financial regulation: accredited investor. Now, what was that about capital concentration?

icedchai 8y ago
You think so? Due to inflation, I think the bar for "accredited investor" feels pretty low these days. HN must be full of middle class individuals with $1M+ USD networth.
- otoburb 8y ago
  >>HN must be full of middle class individuals with $1M+ USD networth. For the HN demographic that doesn't own a house and "only" pays rent, I'd agree with you. But another portion of the HN demographic that does own a flat or property may not qualify, as the definition of an accredited investor (at least in the US[1]) is $1M+ USD of investible assets excluding their primary residence. [1] https://en.wikipedia.org/wiki/Accredited_investor#United_States https://en.wikipedia.org/wiki/Accredited_investor#United_Sta...
  - sokoloff 8y ago
    Some of this demographic will meet the other (income) test: a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year
sokoloff 8y ago
IMO, the SEC accredited investor rules are in place to make it a federal crime to scam non-accredited investors. Though I tend to be anti-regulation in general, I think these are good laws as I can only imagine how many investment scams would be running otherwise.
- CryptoPunk 8y ago
  They make it a federal crime to offer securities to non-wealthy people. Characterizing all such offers as scams is a prejudicial over-simplification, and the kind of sweeping and presumptive generalization that rationalizes repression.
  - sokoloff 8y ago
    No, they made it a federal crime to offer non-registered securities to non-wealthy people. Registered securities (stocks, bonds, mutual funds, etc.) are widely available to non-wealthy people and are probably a better investment for most of them, frankly, because of the concentration of risk inherent in a small dollar portfolio of non-registered securities and the idea that registered securities will have some standardized reporting requirements and that one could rely on the market to do a certain amount of due diligence and price discovery.
    - CryptoPunk 8y ago
      Non-registered securities are those that are issued by any company not worth over something on the order of $100 million, since any company smaller than that cannot afford to get their securities registered. Anyway, this distinction doesn't change my point: offers of such securities to unaccredited investors are not categorically "scams". This kind of critical reductionism is reckless to individual rights and liberty.
      - gamblor956 8y ago
        Companies can get registered fairly cheaply; a company with almost no assets or value could do it. The expense comes from meeting the requirements to be registered on a large exchange like NYSE or NASDAQ (both of which are non-governmental entities). This is why small companies that have public stock are traded on "penny" exchanges.
        CryptoPunk 8y ago

icedchai 8y ago

You think so? Due to inflation, I think the bar for "accredited investor" feels pretty low these days. HN must be full of middle class individuals with $1M+ USD networth.

otoburb 8y ago
>>HN must be full of middle class individuals with $1M+ USD networth. For the HN demographic that doesn't own a house and "only" pays rent, I'd agree with you. But another portion of the HN demographic that does own a flat or property may not qualify, as the definition of an accredited investor (at least in the US[1]) is $1M+ USD of investible assets excluding their primary residence. [1] https://en.wikipedia.org/wiki/Accredited_investor#United_States https://en.wikipedia.org/wiki/Accredited_investor#United_Sta...
- sokoloff 8y ago
  Some of this demographic will meet the other (income) test: a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year

sokoloff 8y ago

IMO, the SEC accredited investor rules are in place to make it a federal crime to scam non-accredited investors. Though I tend to be anti-regulation in general, I think these are good laws as I can only imagine how many investment scams would be running otherwise.

CryptoPunk 8y ago
They make it a federal crime to offer securities to non-wealthy people. Characterizing all such offers as scams is a prejudicial over-simplification, and the kind of sweeping and presumptive generalization that rationalizes repression.
- sokoloff 8y ago
  No, they made it a federal crime to offer non-registered securities to non-wealthy people. Registered securities (stocks, bonds, mutual funds, etc.) are widely available to non-wealthy people and are probably a better investment for most of them, frankly, because of the concentration of risk inherent in a small dollar portfolio of non-registered securities and the idea that registered securities will have some standardized reporting requirements and that one could rely on the market to do a certain amount of due diligence and price discovery.
  - CryptoPunk 8y ago
    Non-registered securities are those that are issued by any company not worth over something on the order of $100 million, since any company smaller than that cannot afford to get their securities registered. Anyway, this distinction doesn't change my point: offers of such securities to unaccredited investors are not categorically "scams". This kind of critical reductionism is reckless to individual rights and liberty.
    - gamblor956 8y ago
      Companies can get registered fairly cheaply; a company with almost no assets or value could do it. The expense comes from meeting the requirements to be registered on a large exchange like NYSE or NASDAQ (both of which are non-governmental entities). This is why small companies that have public stock are traded on "penny" exchanges.
      - CryptoPunk 8y ago