4 ms·

While SEC has "good intentions" behind regulations around who qualifies to invest, and also behind forcing companies to disclose certain financials if they are

While SEC has "good intentions" behind regulations around who qualifies to invest, and also behind forcing companies to disclose certain financials if they are open to public investment, it is in a sense monopolizing the service of "investment diligence." The absence of these regulations will create room for businesses who would vet investments for you at different risk levels. Non-governmental standards certification organizations (think ISO, JD Power, etc) fulfill this role for non-financial sectors. Existence of SEC regulations may in fact give a false sense of safety in many cases. People make dumb investments today despite SEC.

tptacek 6y ago
We ran this experiment before and leaving the vetting of securities entirely to the market was a calamity. Not only that, but we just watched the market's most important and credible vetting authorities, the ratings agencies, beclown themselves.
- octoberfranklin 6y ago
  beclown themselves Verb Of The Month award has been conferred.
LiquidSky 6y ago
The crypto space has thankfully exploded this fantasy and demonstrated exactly what the absence of regulations looks like.
- seibelj 6y ago
  Yet bitcoin is close to its all time high! HNers have been telling me every month for the past 10 years that the wheels were about to come off... any day now...
  - octoberfranklin 6y ago
    haters gonna hate
  - johncolanduoni 6y ago
    AAPL is at its all time high too. Doesn’t do anything for the people who invested in pets.com 20 years ago. There’s a lot more absolute shitcoins than successful ones.
- kajumix 6y ago
  The limits to how far a government should go to protect sane adults from themselves are arbitrary, and inevitably end up stifling progress. Any regulation in crypto space will be damaging so early in the game. A Darwinian wiping-out of incompetent investors may seem ruthless but may in fact be better for society.
dragonwriter 6y ago
> While SEC has "good intentions" behind regulations around who qualifies to invest, and also behind forcing companies to disclose certain financials if they are open to public investment, it is in a sense monopolizing the service of "investment diligence." Its not monopolizing diligence, its setting a floor for diligence for investments by people outside of (expanded by this action) pool of investors. > The absence of these regulations will create room for businesses who would vet investments for you at different risk levels. Are you talking about a hypothetical scenario where the SEC removed accredited investor rules rather than expanding it to included basically people with licenses or currently-active professional roles related to investing rather than merely people with lots of money? Also, such businesses exist already in the financial space.
- kajumix 6y ago
  > Its not monopolizing diligence, its setting a floor for diligence for investments by people outside of (expanded by this action) pool of investors. The floor just happens to be very close to the ceiling excluding many people with varying risk tolerances.
lumberjack 6y ago
>The absence of these regulations will create room for businesses who would vet investments for you at different risk levels. Those already exist and are called managed funds. The problem is, there is often a conflict of interest and the fund managers profit off the ignorance of their own costumers. This is actually a very big problem in the financial space: the incentives of the B2C entity and the costumer are almost never aligned. The costumer lacks information and the B2C is supposed to help them attain that information, but the B2C entity can also profit off the ignorance of their customer and this is often more profitable than getting paid a fixed fee for honest advice.
- pdonis 6y ago
  > Those already exist and are called managed funds. The problem is, there is often a conflict of interest Which means managed funds are not what the GP is talking about. The GP is talking about a third party that does not have any conflict of interest.

tptacek 6y ago

We ran this experiment before and leaving the vetting of securities entirely to the market was a calamity. Not only that, but we just watched the market's most important and credible vetting authorities, the ratings agencies, beclown themselves.

octoberfranklin 6y ago
beclown themselves Verb Of The Month award has been conferred.

LiquidSky 6y ago

The crypto space has thankfully exploded this fantasy and demonstrated exactly what the absence of regulations looks like.

seibelj 6y ago
Yet bitcoin is close to its all time high! HNers have been telling me every month for the past 10 years that the wheels were about to come off... any day now...
- octoberfranklin 6y ago
  haters gonna hate
- johncolanduoni 6y ago
  AAPL is at its all time high too. Doesn’t do anything for the people who invested in pets.com 20 years ago. There’s a lot more absolute shitcoins than successful ones.
kajumix 6y ago
The limits to how far a government should go to protect sane adults from themselves are arbitrary, and inevitably end up stifling progress. Any regulation in crypto space will be damaging so early in the game. A Darwinian wiping-out of incompetent investors may seem ruthless but may in fact be better for society.

dragonwriter 6y ago

> While SEC has "good intentions" behind regulations around who qualifies to invest, and also behind forcing companies to disclose certain financials if they are open to public investment, it is in a sense monopolizing the service of "investment diligence." Its not monopolizing diligence, its setting a floor for diligence for investments by people outside of (expanded by this action) pool of investors. > The absence of these regulations will create room for businesses who would vet investments for you at different risk levels. Are you talking about a hypothetical scenario where the SEC removed accredited investor rules rather than expanding it to included basically people with licenses or currently-active professional roles related to investing rather than merely people with lots of money? Also, such businesses exist already in the financial space.

kajumix 6y ago
> Its not monopolizing diligence, its setting a floor for diligence for investments by people outside of (expanded by this action) pool of investors. The floor just happens to be very close to the ceiling excluding many people with varying risk tolerances.

lumberjack 6y ago

>The absence of these regulations will create room for businesses who would vet investments for you at different risk levels. Those already exist and are called managed funds. The problem is, there is often a conflict of interest and the fund managers profit off the ignorance of their own costumers. This is actually a very big problem in the financial space: the incentives of the B2C entity and the costumer are almost never aligned. The costumer lacks information and the B2C is supposed to help them attain that information, but the B2C entity can also profit off the ignorance of their customer and this is often more profitable than getting paid a fixed fee for honest advice.

pdonis 6y ago
> Those already exist and are called managed funds. The problem is, there is often a conflict of interest Which means managed funds are not what the GP is talking about. The GP is talking about a third party that does not have any conflict of interest.