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The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer an

The SEC has no place in a free market. If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the SEC... How good is that?! If my startup fails because I hired the wrong people, I take the full blame. Why should it be different if I invested in the wrong company or trusted the wrong company with my money? As someone who is trustworthy and providing a service, I am harmed by the SEC creating a false veneer or respectability for investors to invest in my biggest competitors. I'd rather investors be forced to do due diligence.

zacmps 3y ago
Because it causes preventable harm.
nindalf 3y ago
In the real world, we try to have government operate law enforcement. Doesn’t always work, but it works a lot better than outsourcing law enforcement on financial scams to retail investors.
djur 3y ago
The analogy isn't valid. If your startup fails because the people you hire steal from the company, you have legal recourse. If you lose money because you invest in companies that underperform, the SEC won't intervene. No markets operate with perfect information for all participants. That creates the opportunity for fraud, and governments regulate to prevent fraud. In principle this permits broader access to markets (whether this is actually true is a different subject).
kaiokendev 3y ago
> If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Most people can't do that, and even if they could, most people don't have the time nor the patience to do that
- duskwuff 3y ago
  More to the point, you generally don't know a company is commingling (and/or trading using!) customer funds until it's already too late.
pmulard 3y ago
The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?! -- I'd much rather pool our money into a commission that does this for the population than spend every waking moment personally auditing companies for breaking the rules. Oh, and I have to set them too. No thanks.
- clarkmoody 3y ago
  How many drugs had FDA approval that was later retracted after much harm was done?
  - bitvoid 3y ago
    If the FDA didn't exist, how many more harmful drugs would there be? Would those harmful drugs that had approval retracted still be out there being prescribed? Just because the FDA is not perfect does not mean that it's a net negative.
    - nateabele 3y ago
      That's the hypothetical half of the equation. The tangible, measurable half is how many people the FDA has killed by denying access to life-saving treatments. A number of studies[0] have been conducted on this topic. [0] https://www.fdareview.org/issues/theory-evidence-and-examples-of-fda-harm/ https://www.fdareview.org/issues/theory-evidence-and-example...
      - IggleSniggle 3y ago
        Right, of course. Any preventative treatment is difficult to justify, as it's a risk waylaid, whereas treating symptoms has a visible direct impact on problems faced today; nevermind that it costs 500x as much and has worse outcomes.
    - 3y ago
Loughla 3y ago
If the company says it doesn't co-mingle funds, but does, why should I be punished as a retail investor?
- heavyset_go 3y ago
  You're just acceptable collateral damage to someone who is ideologically opposed to regulations. At best, your legal recourse is to "sue" an entity that has already been dissolved and bankrupted.
nvy 3y ago
Regulators keep big fish from engaging in predatory behavior. Is the SEC flawed? Absolutely. But the SEC makes markets more free, not less.
- throwawaymaths 3y ago
  Does it? Suppose you'd like to keep the fruits of your hard earned labor on an asset that isn't subjected to inflation at the hands of a capricious or warmongering country. And you'd rather not speculate on greedy capitalists. The SEC is effectively limiting your freedom to do so (whether or not that's a good personal choice)
  - nvy 3y ago
    In our society the concept of a "Free Market" is not one where participants are free to do entirely as they please without consequence. The use of the word Free in "Free Market" implies a freedom from restricted competition which definitionally requires a regulatory body to maintain a somewhat level playing field. Again, in order to ensure this healthy competition in markets, regulation is required. This is why we attempt to inhibit monopolists, and why antitrust laws in general exist. Absolute freedom in the personal sense is expressly not a goal of modern free market economics. You are free, subject to taxation of course, to hang onto your "hard earned labor" on your shitcoins but Kraken is not free to operate as a securities exchange unless it complies with the regulations in place so as to ensure an orderly and healthy market. DeFi people are constantly finding out[0] why some centralization and oversight is a good idea. [0] https://www.youtube.com/shorts/WntjAM2wqF8 https://www.youtube.com/shorts/WntjAM2wqF8
ranger207 3y ago
> The SEC has no place in a free market. You're right. This is why we don't want a completely _free_ market, we want a _competitive_ market that has actors to prevent and punish fraud and abuse.
patmorgan23 3y ago
You're assuming perfect information which does not exist in the real world. Regulators are good actually. Forcing companies to make truthful and accurate disclosures and forcing them to implement basic controls is important. It makes everyone better and protects investors and customers from unnecessary frauds and disruptions.
NikolaNovak 3y ago
But at its best, government agencies are exactly that. It's free people in a free market learning from their mistakes and saying "well THAT sucked! Let's not do THAT again!". But you know, more efficiently, as is the market's want - rather than re learning the same lesson over and over and over again, we write it down and codify it. Of course, that's regulations at their best. Regulations at their worst are pretty awful too! But given your post was about the very existence of regulations and their related agencies, I thought I'd offer a perspective :).
RandomLensman 3y ago
Because people are not islands? If you live in a non-society then that is fine, otherwise financial schemes can pretty much bring down countries (see Albania).
- jowea 3y ago
  Even in the US, AFAIK the reason these securities regulations exist is that companies did not disclose information before they were forced through. An efficient theoretical free market requires public information, the SEC exists to enforce that.

zacmps 3y ago

Because it causes preventable harm.

nindalf 3y ago

In the real world, we try to have government operate law enforcement. Doesn’t always work, but it works a lot better than outsourcing law enforcement on financial scams to retail investors.

djur 3y ago

The analogy isn't valid. If your startup fails because the people you hire steal from the company, you have legal recourse. If you lose money because you invest in companies that underperform, the SEC won't intervene. No markets operate with perfect information for all participants. That creates the opportunity for fraud, and governments regulate to prevent fraud. In principle this permits broader access to markets (whether this is actually true is a different subject).

kaiokendev 3y ago

> If people trust a company which co-mingles funds, they should be punished for misplacing their trust. Most people can't do that, and even if they could, most people don't have the time nor the patience to do that

duskwuff 3y ago
More to the point, you generally don't know a company is commingling (and/or trading using!) customer funds until it's already too late.

pmulard 3y ago

The FDA has no place in a free market. If people trust a company which poisons their food, they should be punished for misplacing their trust. Both the scammer and the scammed deserve a share of the punishment. Life naturally punishes the scammed already and teaches them a lesson at the same time... Without the help of the FDA... How good is that?! -- I'd much rather pool our money into a commission that does this for the population than spend every waking moment personally auditing companies for breaking the rules. Oh, and I have to set them too. No thanks.

clarkmoody 3y ago
How many drugs had FDA approval that was later retracted after much harm was done?
- bitvoid 3y ago
  If the FDA didn't exist, how many more harmful drugs would there be? Would those harmful drugs that had approval retracted still be out there being prescribed? Just because the FDA is not perfect does not mean that it's a net negative.
  - nateabele 3y ago
    That's the hypothetical half of the equation. The tangible, measurable half is how many people the FDA has killed by denying access to life-saving treatments. A number of studies[0] have been conducted on this topic. [0] https://www.fdareview.org/issues/theory-evidence-and-examples-of-fda-harm/ https://www.fdareview.org/issues/theory-evidence-and-example...
    - IggleSniggle 3y ago
      Right, of course. Any preventative treatment is difficult to justify, as it's a risk waylaid, whereas treating symptoms has a visible direct impact on problems faced today; nevermind that it costs 500x as much and has worse outcomes.
  - 3y ago

Loughla 3y ago

If the company says it doesn't co-mingle funds, but does, why should I be punished as a retail investor?

heavyset_go 3y ago
You're just acceptable collateral damage to someone who is ideologically opposed to regulations. At best, your legal recourse is to "sue" an entity that has already been dissolved and bankrupted.

nvy 3y ago

Regulators keep big fish from engaging in predatory behavior. Is the SEC flawed? Absolutely. But the SEC makes markets more free, not less.

throwawaymaths 3y ago
Does it? Suppose you'd like to keep the fruits of your hard earned labor on an asset that isn't subjected to inflation at the hands of a capricious or warmongering country. And you'd rather not speculate on greedy capitalists. The SEC is effectively limiting your freedom to do so (whether or not that's a good personal choice)
- nvy 3y ago
  In our society the concept of a "Free Market" is not one where participants are free to do entirely as they please without consequence. The use of the word Free in "Free Market" implies a freedom from restricted competition which definitionally requires a regulatory body to maintain a somewhat level playing field. Again, in order to ensure this healthy competition in markets, regulation is required. This is why we attempt to inhibit monopolists, and why antitrust laws in general exist. Absolute freedom in the personal sense is expressly not a goal of modern free market economics. You are free, subject to taxation of course, to hang onto your "hard earned labor" on your shitcoins but Kraken is not free to operate as a securities exchange unless it complies with the regulations in place so as to ensure an orderly and healthy market. DeFi people are constantly finding out[0] why some centralization and oversight is a good idea. [0] https://www.youtube.com/shorts/WntjAM2wqF8 https://www.youtube.com/shorts/WntjAM2wqF8

ranger207 3y ago

> The SEC has no place in a free market. You're right. This is why we don't want a completely _free_ market, we want a _competitive_ market that has actors to prevent and punish fraud and abuse.

patmorgan23 3y ago

You're assuming perfect information which does not exist in the real world. Regulators are good actually. Forcing companies to make truthful and accurate disclosures and forcing them to implement basic controls is important. It makes everyone better and protects investors and customers from unnecessary frauds and disruptions.

NikolaNovak 3y ago

But at its best, government agencies are exactly that. It's free people in a free market learning from their mistakes and saying "well THAT sucked! Let's not do THAT again!". But you know, more efficiently, as is the market's want - rather than re learning the same lesson over and over and over again, we write it down and codify it. Of course, that's regulations at their best. Regulations at their worst are pretty awful too! But given your post was about the very existence of regulations and their related agencies, I thought I'd offer a perspective :).

RandomLensman 3y ago

Because people are not islands? If you live in a non-society then that is fine, otherwise financial schemes can pretty much bring down countries (see Albania).

jowea 3y ago
Even in the US, AFAIK the reason these securities regulations exist is that companies did not disclose information before they were forced through. An efficient theoretical free market requires public information, the SEC exists to enforce that.