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What happens in a market downturn and people suddenly holding private shares worth a lot less than what they paid for? Then, you have lawsuits from these holde
by soldergenie 12y ago
What happens in a market downturn and people suddenly holding private shares worth a lot less than what they paid for? Then, you have lawsuits from these holders claiming they didn't understand the risks of what they were investing in (e.g.: no financials statements, etc) and these schemes will start coming under the same regulatory scrutiny as public companies.
- ojbyrne 12y ago2 words: "accredited investors." 2 more words: "no recourse."
- q2 12y agoAs long as this industry exposure is low, bubble bursts may not impact main stream economy but if the exposure is more, then as previous financial crisis shows,---due to inter linkages in finance sector and due to wrong judgments of even supposedly sophisticated investors,--- main stream economy cannot live insulated life. So as of now, risk may be limited to investors in question only but if the scope and invested money increases, then it can create fresh financial crisis worldwide.