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The good of accredited investor laws far outweigh the bad. People who don't have a lot of money are much more likely to not have good money management skills
by pfisch 13y ago
The good of accredited investor laws far outweigh the bad.
People who don't have a lot of money are much more likely to not have good money management skills than people who are able to hold on to lots of money for long time periods.
Without accredited investor laws you would just pour tons and tons of dumb money into the system and the volume of scams would go way up.
This is not to say there are not rich people being conned, but when that happens it often does not bankrupt them because they are less likely to go all in on a single asset. Something people with poor money management skills want to do all the time.
- gojomo 13y agoTrue scams aren't much slowed by accredited investor laws. Scammers just move into the areas - gambling, real estate, amateur high-frequency-trading, under-the-table offerings - that escape SEC control. And people with poor money-management skills can already put all their money into legal things that go to zero - like lottery tickets or leveraged real-estate or Enron or pre-reorganization GM. And, 'dumb money' mainly gets smart by trial-and-error, and observing the lessons of peers. Locking all non-millionaires out of private investing prevents that process from even starting.