Private Trading Draws S.E.C. Scrutiny

Tuesday, 28 December 2010 14:42

Wow, talk about big government… The SEC misses the big one and now they are poking around in PRIVATE transactions!!? How does that work? Where does this end? Is the SEC going investigate when the flower shop on one corner buys the rival on the other corner, or baseball card sales, or art sales, or non-dealer car sales? Is the SEC busy barking up every other tree, to distract the public from a real scam? Hmm, why do these private transactions happen?

Oh that is right… 1) Sarbanes-Oxley effectively made it illegal to come to market unless of course your mission is to rip off the public. 2) Some companies augment compensation in stock and the employee for personal reasons wishes to convert their relatively inconvertible wealth in shares to dollars rather than behave as a fool and believe that their Netscape stock will recover after tanking from a high of 174.50 to single digits. 3) There is a considerable amount of crap on Wall Street. Buying something new that lacks baggage may be less risky than the prevailing notion of conservative investing.

Ahh, but my explanation is not good enough for the SEC. I cannot wait until the SEC passes legislation** that mandates that before all investment transactions can be completed a questionnaire must be completed. The questionnaire would be marketed as a way of ensuring public fairness in all transactions and it could prevent people from making hasty decisions. Market participants would be required to explain and supply evidence to the government why they are purchasing a particular instrument, except the big guys because their lobbyists would assert that compliance would be too burdensome. ** Yes, I am aware that the SEC only has rule making authority and cannot actually pass legislation. The point of the sentence is to highlight the odd relationship Executive branch government agencies like the SEC or law enforcement often have with the Legislative branch.

Full Article: Private Trading Draws S.E.C. Scrutiny