how did this become something our society is so focused on policing? I get rules against murder, stealing, things that cause direct harm but why do investments need so much gatekeeping? "oh no! people are pooling money in a common enterprise to make profit off the work of someone else in the enterprise!" seems weak
I think it’s mostly about protecting people from grifters. Unfortunately investing is risky and it’s very difficult to evaluate investments well so that means it’s an easy avenue for dishonest people to steal from others under the guise of “investment”
empirically, it is one of the most common ways to scam people. you go to someone struggling, $20k scrapped together, try to sell them a lemon car for $10k, they say no bc they cant afford it you go to the same person and say you have an amazing way to double their money in just 6 months...
Maybe I’m too cynical, but it seems like the US Gov's focus on investment regs is less about protecting the little guy and more about maintaining economic dominance. The US has held a grip on global capital flow. The Howey Test seems conveniently positioned to curb competition, under the guise of investor protection
part of how i got in to crypto. saw what it took to be an accredited investor and i started looking for other options.
My understanding is that "the efforts of others" means that you give me your money and the return depends on what I do. For example, when you invest in stocks, the return depends on what the management does. In contrast when you buy gold for example, the price does not depend on what a single company board does.
To be fair, the framework held up well for many decades, reducing information asymmetry and fraud, albeit with unintended consequences. Tidy markets are in everyone’s interest. However it’s become woefully out of date and self-interested bureaucrats are arbitrarily preventing its updating.
our ability to invest in aggregate depends on information, if it's genuinely intended to translate into innovative gains in productivity. I'm sure that there will be rising demand for investment copilots that help with cogsec & due diligence. without some form of self-regulation, it devolves into the house winning.
That's a good point. Morality precedes laws. Hard to make out what those morals are here.