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Accredited investor laws and other obscure regimes have long been modeled in a similar way. There is no prohibition or sanction from the state to a non-accredi
by vmception 5y ago
Accredited investor laws and other obscure regimes have long been modeled in a similar way.
There is no prohibition or sanction from the state to a non-accredited investor, a US resident can invest in anything if they figure out how to. The way you use your money is a form of constitutionally granted expression in the US, with enforcement relying on the 14th amendment and would not be able to separate or prohibit investors in a form of caste system.
But the same outcome is achieved as private businesses raising capital (and the broker dealers) are the ones that face the potential liability from the state, (exacerbated by the much higher likelyhood of poor people complaining about their money to regulators or launching their own private litigation), and so the intermediary therefore enforces the accredited investor prohibition on behalf of the state in a way that is likely much more distributed and effective than the state could ever do itself.
The model of law has always has always been an endrun around the constitution, and maintains a durable consensus.
It is interesting to see people just now getting inspired by this form of law, due to the less obscure topics they are covering.
- hirundo 5y ago"...as private businesses raising capital (and the broker dealers) are the ones that face the potential liability from the state, (exacerbated by the much higher likelyhood of poor people complaining about their money to regulators or launching their own private litigation), and so the intermediary therefore enforces the accredited investor prohibition on behalf of the state..." As you describe this it is very different in effect from the Texas law, in that SB-8 does not require any particularized injury of the plaintiff. If you don't need to be injured to sue successfully, the litigation pressure is vastly more intense because anyone can pursue it, and the fines are more than sufficient motivation.
- vmception 5y agoAccredited investor laws don't require injury. The injury just creates the likelihood that it gets noticed. But yes the major difference in capital raising laws is that the state regulator is the biggest issue, whereas the executive branch is (mostly) absent in SB-8 and likely will be completely absent.
- hn_throwaway_99 5y agoI'm not familiar with how the accredited investor laws work, but at least from your description, and reporting on the Texas abortion law, there do seem to be crucial differences beyond one just being "a less obscure topic". The Texas abortion law basically deputizes anyone in the state to be an "abortion tattler", except for state officials who are expressly prohibited from enforcing the law. That "innovation" is what is fundamentally new about this law and why some argue it evades federal judicial review, and that seems very different from accredited investor laws.
- golemotron 5y agoYour comment makes me wonder whether SCOTUS could have just nullified the part of the law which forbade state actors from filing suit. That could have given standing to sue the AG, for instance.
- thecolorblue 5y ago> The Texas abortion law basically deputizes anyone in the state to be an "abortion tattler"... Actually, I don't think they are required to be in the state of Texas. At least, all the descriptions of the bill I have seen have not mentioned that requirement. Example: https://en.m.wikipedia.org/wiki/Texas_Heartbeat_Act https://en.m.wikipedia.org/wiki/Texas_Heartbeat_Act