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I can think of many ways to abuse this site[0], and that is just from an initial standpoint. This could be the next big SEC case waiting to happen. Are there m

I can think of many ways to abuse this site[0], and that is just from an initial standpoint. This could be the next big SEC case waiting to happen. Are there measures in place to prevent from such easy abuse? [0] http://en.wikipedia.org/wiki/Pump_and_dump http://en.wikipedia.org/wiki/Pump_and_dump - This could be perpetrated on an entirely different scale with people seeking out the "guidance" of a few big players

skhatri11 11y ago
Hi - I'm Saleem, the Co-Founder & CEO of Instavest. We've been very careful to stay within the confines of SEC and FINRA law. We have a number of safeguards in place to protect our customers, including but not limited to: 1. Customers can only trade on NYSE or NASDAQ only - no OTC / Pink Sheets; 2. There is a minimum 14 day hold (this is enforced by Instavest, not our brokerage partner) 3. An investor must disclose if the asset they are purchasing is held on another platform 4. Moderation and review prior to an investment being shared with the community 5. Lead investors have to "put their money where their mouth is" before an investment is shared Trading in NYSE and NASDAQ securities that highly liquid and have a high average daily trading volume makes it very difficult for any sort of market manipulation, including the pump and dump scheme you referenced.
- Enzolangellotti 11y ago
  Saleem, you need to fix the TOS text at the end of the page. Not only it's not formatted but it calls for a link which isn't there (Desktop using the latest version of firefox and windows, adblock disabled).
  - zallarak 11y ago
    Can you please post the specific line (or just email z@instavest.com)? I can't see what you're talking about. Thanks for reporting it, once you let us know we will fix it ASAP.
    - Enzolangellotti 11y ago
      Leveraged ETFs are inherently more volatile than their underlying benchmark or index. For more information, CLICK HERE. Accounts are carried and cleared with First Southwest Company ("FSC").
  - zallarak 11y ago
    Thanks, we fixed it!
- gruez 11y ago
  >3. An investor must disclose if the asset they are purchasing is held on another platform workaround: get your spouse/in laws/friends to hold the assets for you >4. Moderation and review prior to an investment being shared with the community Can you elaborate how this would work? >5. Lead investors have to "put their money where their mouth is" before an investment is shared How would this work if an investor has $500 invested in a company, but his followers have a total of $500,000 invested?
  - skhatri11 11y ago
    3. Like other financial institutions, we cannot stop bad people from doing bad things. What we can do is put the proper safeguards and procedures to protect people. 4. Let's say you're an investment leader. You buy Tesla and you submit a writeup. The trade gets executed. The write up is reviewed internally by member of the Instavest team and is cross checked for financial discrepancies against SEC filings. Of course, each person prior to using the platform and when posting an investment is disclosing that he or she is not privy to material non public information, etc. 5. You can put $500 in a stock. There is no minimum investment size. I will say that the absolute dollar amount demonstrates some level of conviction to our members. We currently are not capping the level of co-investment but could do so in the near future.
    - discardorama 11y ago
      > The write up is reviewed internally by member of the Instavest team and is cross checked for financial discrepancies against SEC filings. Is this really scalable?
      - jessedhillon 11y ago
        > Is this really scalable? To what scale? If they've got ~100,000 active lead investors, each executing one trade a week, that's 1,000 reviewers reading 100 plans a week. If it takes 15-30 minutes to read and validate each one (I'm assuming a cursory check here), then we're talking ~35 hours a week. If each lead investor's trade can trigger 25 follow-on trades, that's $8.75M in trading fees, per week. Obviously, those are nice, blue sky numbers, but I think it's clear that in their best case, the biggest problem will be hiring enough qualified reviewers, and a thousand employees is a reasonable hiring target IMO.
nrao123 11y ago
I am not sure how this is a pump & dump scheme. Covester (backed by USV and acquired by Interactive brokers) has a similar model. Wealthfront's predecessor -KaChing-(backed by Benchmark) also allowed you to replicate trades of smart investors. Both Covester/Ka-Ching wanted to disrupt the mutual fund model where any smart guy sitting in a basement can become a portfolio manager. The theory is not so far fetched because Michael Burry ( http://en.m.wikipedia.org/wiki/Michael_Burry http://en.m.wikipedia.org/wiki/Michael_Burry ) was discovered by Wall Street after talking about on Yahoo Message boards. BUT... KaChing pivoted to a modern day financial advisor focused on making Index investments (like DFA) & Covestor sold to IB. This leads me to believe that the market to build a big VC backed size business may not be there.
- skhatri11 11y ago
  See answer from below. Many sites have gotten it wrong my doing auto buy. We built Instavest for ourselves. I don't want to give someone else a pile of my hard earned money and let them make investments without my approval. Additionally, I want the option to find investment "gems". That is, one off opportunities that I resonate with for any number of reasons. By sifting through a list of curated investments and choosing whether or not to buy in, I preserve my right to manage my money and do what I think is right for my risk / reward profile. M

skhatri11 11y ago

Hi - I'm Saleem, the Co-Founder & CEO of Instavest. We've been very careful to stay within the confines of SEC and FINRA law. We have a number of safeguards in place to protect our customers, including but not limited to: 1. Customers can only trade on NYSE or NASDAQ only - no OTC / Pink Sheets; 2. There is a minimum 14 day hold (this is enforced by Instavest, not our brokerage partner) 3. An investor must disclose if the asset they are purchasing is held on another platform 4. Moderation and review prior to an investment being shared with the community 5. Lead investors have to "put their money where their mouth is" before an investment is shared Trading in NYSE and NASDAQ securities that highly liquid and have a high average daily trading volume makes it very difficult for any sort of market manipulation, including the pump and dump scheme you referenced.

Enzolangellotti 11y ago
Saleem, you need to fix the TOS text at the end of the page. Not only it's not formatted but it calls for a link which isn't there (Desktop using the latest version of firefox and windows, adblock disabled).
- zallarak 11y ago
  Can you please post the specific line (or just email z@instavest.com)? I can't see what you're talking about. Thanks for reporting it, once you let us know we will fix it ASAP.
  - Enzolangellotti 11y ago
    Leveraged ETFs are inherently more volatile than their underlying benchmark or index. For more information, CLICK HERE. Accounts are carried and cleared with First Southwest Company ("FSC").
- zallarak 11y ago
  Thanks, we fixed it!
gruez 11y ago
>3. An investor must disclose if the asset they are purchasing is held on another platform workaround: get your spouse/in laws/friends to hold the assets for you >4. Moderation and review prior to an investment being shared with the community Can you elaborate how this would work? >5. Lead investors have to "put their money where their mouth is" before an investment is shared How would this work if an investor has $500 invested in a company, but his followers have a total of $500,000 invested?
- skhatri11 11y ago
  3. Like other financial institutions, we cannot stop bad people from doing bad things. What we can do is put the proper safeguards and procedures to protect people. 4. Let's say you're an investment leader. You buy Tesla and you submit a writeup. The trade gets executed. The write up is reviewed internally by member of the Instavest team and is cross checked for financial discrepancies against SEC filings. Of course, each person prior to using the platform and when posting an investment is disclosing that he or she is not privy to material non public information, etc. 5. You can put $500 in a stock. There is no minimum investment size. I will say that the absolute dollar amount demonstrates some level of conviction to our members. We currently are not capping the level of co-investment but could do so in the near future.
  - discardorama 11y ago
    > The write up is reviewed internally by member of the Instavest team and is cross checked for financial discrepancies against SEC filings. Is this really scalable?
    - jessedhillon 11y ago
      > Is this really scalable? To what scale? If they've got ~100,000 active lead investors, each executing one trade a week, that's 1,000 reviewers reading 100 plans a week. If it takes 15-30 minutes to read and validate each one (I'm assuming a cursory check here), then we're talking ~35 hours a week. If each lead investor's trade can trigger 25 follow-on trades, that's $8.75M in trading fees, per week. Obviously, those are nice, blue sky numbers, but I think it's clear that in their best case, the biggest problem will be hiring enough qualified reviewers, and a thousand employees is a reasonable hiring target IMO.

nrao123 11y ago

I am not sure how this is a pump & dump scheme. Covester (backed by USV and acquired by Interactive brokers) has a similar model. Wealthfront's predecessor -KaChing-(backed by Benchmark) also allowed you to replicate trades of smart investors. Both Covester/Ka-Ching wanted to disrupt the mutual fund model where any smart guy sitting in a basement can become a portfolio manager. The theory is not so far fetched because Michael Burry ( http://en.m.wikipedia.org/wiki/Michael_Burry http://en.m.wikipedia.org/wiki/Michael_Burry ) was discovered by Wall Street after talking about on Yahoo Message boards. BUT... KaChing pivoted to a modern day financial advisor focused on making Index investments (like DFA) & Covestor sold to IB. This leads me to believe that the market to build a big VC backed size business may not be there.

skhatri11 11y ago
See answer from below. Many sites have gotten it wrong my doing auto buy. We built Instavest for ourselves. I don't want to give someone else a pile of my hard earned money and let them make investments without my approval. Additionally, I want the option to find investment "gems". That is, one off opportunities that I resonate with for any number of reasons. By sifting through a list of curated investments and choosing whether or not to buy in, I preserve my right to manage my money and do what I think is right for my risk / reward profile. M