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Disastrous for anyone other than those who jumped in without doing their due dilligence? My main gripe with the whole "accredited investor" thing is that its l

Disastrous for anyone other than those who jumped in without doing their due dilligence? My main gripe with the whole "accredited investor" thing is that its literally legalized classism (and I'd argue a violation of the equal protection doctrine, but that's another theory), as the income requirements eliminate a huge swathe of investing for anyone but the 1%. Nothing is stopping an uninformed investor from loading their net worth into a single reuglar stock (you know, those perfectly safe instruments that never ever lose their value and leave you with nothing), so I really, truly don't see what these requirements are protecting anyone from, or why that protection is necessary. If it's really about protection, then education and nondiscriminatory licensing based on testable knowledge would fill that goal, but instead we have income minimums.

CPLX 8y ago
As a society we believe that allowing people of modest means to be swindled out of their savings is an unacceptable outcome and have enacted a large battery of laws to avoid it. These laws came about from very real and serious experiences that were, in fact, catastrophic for many communities. It's a real live problem, and it goes back a long way. If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here. You can also do the "who cares if people want to get swindled let them" approach, but recognize that you've been outvoted on this topic, we've decided to protect people like we try to protect people from unsafe food, consumer products scams, and many other situations.
- Karunamon 8y ago
  >If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here. Then it's a good thing nobody here, least of all me, asked for "unregulated markets". Literally your entire post is either responding to points I didn't make, or makes arguments I already addressed, making this exchange a complete waste of time for both of us.
- noarchy 8y ago
  I'm not sure that OP was referring to people being swindled, specifically, so you speaking on behalf of society (the "we" stuff) probably wasn't needed. I think it is understood that the regulations are in place to mitigate risk for the most vulnerable. Whether this has been the right implementation (income vs some other means) is what I think OP was getting at.
- CryptoPunk 8y ago
  As a society we don't believe anything. Some people believe marriage is between a man and a woman. Some people believe marijuana should be banned for the good of the population. Some, like you, believe that we should prevent poor people from making investments that the government has not vetted. >>If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here. Are you saying that the discussion has to start from the premise that on the balance, the outcome of unregulated markets is less desirable than that of a regulated market? Because I would strongly contest that premise.
JumpCrisscross 8y ago
> other than those who jumped in without doing their due dilligence? Diligencing private securities is expensive. Getting information is expensive, the legal work is expensive, the negotiations are expensive. This is fundamental to the lack of reporting requirements and standardisation. Small checks simply don’t make sense in these markets.
- hyprCoin 8y ago
  It especially doesn't make sense if you are a venture capitalist who now faces competition.
milesvp 8y ago
If you have the means to do proper due diligence, then you can find a way to get your investment dollars into the hands of someone who can invest for you, even if you can't meet the requirements to be an accredited investor. While we have many laws that propagate classism in the US, I have a hard time thinking this particular law doesn't overwhelmingly protect those who might otherwise jump on a "stock tip" their buddy told them about.
tptacek 8y ago
It's a form of classism that mostly serves to ensure that it's the rich who get fleeced with wealth management and hedge fund schemes, most of which underperform broad market investment vehicles that have never been cheaper for retail investors.

CPLX 8y ago

As a society we believe that allowing people of modest means to be swindled out of their savings is an unacceptable outcome and have enacted a large battery of laws to avoid it. These laws came about from very real and serious experiences that were, in fact, catastrophic for many communities. It's a real live problem, and it goes back a long way. If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here. You can also do the "who cares if people want to get swindled let them" approach, but recognize that you've been outvoted on this topic, we've decided to protect people like we try to protect people from unsafe food, consumer products scams, and many other situations.

Karunamon 8y ago
>If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here. Then it's a good thing nobody here, least of all me, asked for "unregulated markets". Literally your entire post is either responding to points I didn't make, or makes arguments I already addressed, making this exchange a complete waste of time for both of us.
noarchy 8y ago
I'm not sure that OP was referring to people being swindled, specifically, so you speaking on behalf of society (the "we" stuff) probably wasn't needed. I think it is understood that the regulations are in place to mitigate risk for the most vulnerable. Whether this has been the right implementation (income vs some other means) is what I think OP was getting at.
CryptoPunk 8y ago
As a society we don't believe anything. Some people believe marriage is between a man and a woman. Some people believe marijuana should be banned for the good of the population. Some, like you, believe that we should prevent poor people from making investments that the government has not vetted. >>If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here. Are you saying that the discussion has to start from the premise that on the balance, the outcome of unregulated markets is less desirable than that of a regulated market? Because I would strongly contest that premise.

JumpCrisscross 8y ago

> other than those who jumped in without doing their due dilligence? Diligencing private securities is expensive. Getting information is expensive, the legal work is expensive, the negotiations are expensive. This is fundamental to the lack of reporting requirements and standardisation. Small checks simply don’t make sense in these markets.

hyprCoin 8y ago
It especially doesn't make sense if you are a venture capitalist who now faces competition.

milesvp 8y ago

If you have the means to do proper due diligence, then you can find a way to get your investment dollars into the hands of someone who can invest for you, even if you can't meet the requirements to be an accredited investor. While we have many laws that propagate classism in the US, I have a hard time thinking this particular law doesn't overwhelmingly protect those who might otherwise jump on a "stock tip" their buddy told them about.

tptacek 8y ago

It's a form of classism that mostly serves to ensure that it's the rich who get fleeced with wealth management and hedge fund schemes, most of which underperform broad market investment vehicles that have never been cheaper for retail investors.