3 ms·

This is the SEC trying to protect the "little guy". This is why they can only let "accredited" investors invest that have over a certain amount of money/income.

by abat 13y ago

This is the SEC trying to protect the "little guy". This is why they can only let "accredited" investors invest that have over a certain amount of money/income. If you're outraged, make sure to point your outrage at the government.

m52go 13y ago
Outrage pointed at the government: I don't agree with the supposed intentions of the government. If the government really was trying to 'protect the little guy', it wouldn't allow all those short-term credit schemes that charge exorbitantly high interest rates. Those things are toxic, screwing up peoples' lives all the time, but the government lets it keep on going. What kind of person who can barely put food on the table invest in a startup? It's stupid. Even if you can put food on the table, you should be able to do whatever the hell you want with your money. False advertising and misrepresentation is the issue that needs attention here, not "protecting the little guy."
- nknighthb 13y ago
  Um, it's already all about "false advertising and misrepresentation"! It's all about disclosure. Any company can choose to comply with the reporting requirements and thus "go public", whereupon anyone who wants to buy shares in the company is free to do so at any time, even with their last penny. Even without complying with those requirements, companies can still, to a limited degree, receive investment from a certain number of non-accredited investors. What is it, exactly, that you think the SEC regs say?
exelius 13y ago
Well, the idea is that there are tons of incredibly risky investments out there where you really do need to be a professional investor to properly understand the risk (or at least wealthy enough to absorb a large loss). The idea is to prevent predatory bankers from selling these really risky investments to individuals as if they weren't as risky. Taking on a lot of risk as part of a portfolio strategy is fine, but you need to understand what you're getting into when you're buying leveraged securities, complex debt-equity instruments, etc. I'm glad the average investor can't buy into hedge funds, because you only hear about the successful ones. You don't hear about all the ones that lost 50% of their value in the first year and closed down (and there are plenty of them.)
- m52go 13y ago
  I agree that you have to understand what you're getting into, but I argue it's not limited to products of high finance. What about payday loans, borrowing on credit cards, etc.? Let's not forget about buying houses...we all know how that turned out. Student loans? Like successful hedge funds, you only hear about the flashy side of consumer finance. Thousands get screwed every day from crooked (and non-crooked) schemes aimed at the non-affluent. There's no simply no reason to block access to (potentially) the most lucrative instruments known to man in the name of risk. It's already everywhere.
  - deleted 13y ago
    [deleted]

by abat 13y ago

m52go 13y ago

Outrage pointed at the government: I don't agree with the supposed intentions of the government. If the government really was trying to 'protect the little guy', it wouldn't allow all those short-term credit schemes that charge exorbitantly high interest rates. Those things are toxic, screwing up peoples' lives all the time, but the government lets it keep on going. What kind of person who can barely put food on the table invest in a startup? It's stupid. Even if you can put food on the table, you should be able to do whatever the hell you want with your money. False advertising and misrepresentation is the issue that needs attention here, not "protecting the little guy."

nknighthb 13y ago
Um, it's already all about "false advertising and misrepresentation"! It's all about disclosure. Any company can choose to comply with the reporting requirements and thus "go public", whereupon anyone who wants to buy shares in the company is free to do so at any time, even with their last penny. Even without complying with those requirements, companies can still, to a limited degree, receive investment from a certain number of non-accredited investors. What is it, exactly, that you think the SEC regs say?

exelius 13y ago

Well, the idea is that there are tons of incredibly risky investments out there where you really do need to be a professional investor to properly understand the risk (or at least wealthy enough to absorb a large loss). The idea is to prevent predatory bankers from selling these really risky investments to individuals as if they weren't as risky. Taking on a lot of risk as part of a portfolio strategy is fine, but you need to understand what you're getting into when you're buying leveraged securities, complex debt-equity instruments, etc. I'm glad the average investor can't buy into hedge funds, because you only hear about the successful ones. You don't hear about all the ones that lost 50% of their value in the first year and closed down (and there are plenty of them.)

m52go 13y ago
I agree that you have to understand what you're getting into, but I argue it's not limited to products of high finance. What about payday loans, borrowing on credit cards, etc.? Let's not forget about buying houses...we all know how that turned out. Student loans? Like successful hedge funds, you only hear about the flashy side of consumer finance. Thousands get screwed every day from crooked (and non-crooked) schemes aimed at the non-affluent. There's no simply no reason to block access to (potentially) the most lucrative instruments known to man in the name of risk. It's already everywhere.
- deleted 13y ago
  [deleted]