The SEC has a straightforward mission to protect investors: It must make sure that companies selling securities to investors tell the truth about their businesses, the securities they sell, and the risks involved.
On this fifth anniversary of the Dodd-Frank Act, I wish I was writing a congratulatory letter to all the regulatory agencies in Washington, D.C. for its successful implementation. Instead, I'm expressing the frustration of millions of working families who believe there is a lot of work still to be to done to rein in Wall Street excess.
Five years ago, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) was signed into law. Nevertheless, sections of the law still remain to be implemented because of delays in enacting regulations.
Many people who want to invest in startups, real estate crowdfunding projects, and other privately placed investment vehicles are surprised to learn that these opportunities are typically only open to accredited investors.
From the libertarian praise heaped upon these regulators, and from their own statements, it appears that they are big fans of deregulation. These men are charged with creating and enforcing the financial rules of the road, but they are anti-rule.
SEC Commissioner Michael Piwowar, said in a speech to Cato recently that the goal of the SEC should not be to "promote investor confidence," but instead to "promote investor skepticism." This is a scary example of a radically libertarian philosophy that could cause our financial system to melt down in a big way.
I believe, if you run a modern company, your stock options should be worth money and you should be able to turn around and sell or exercise them. In other words, your company stocks should be able to become your own currency.
Corporations are considered people when it comes to spending shareholder money secretly to thwart public policy goals on health, safety, the environment, and the economy.
The SEC alleges that ITT executives engaged in a scheme to hide looming losses from loans the company guaranteed to students attending its colleges. The company denies the fraud.
Investors need information about political spending so that they can make informed decisions. Political activity creates risk for companies, as Target discovered in 2010 when it saw boycotts in response to political spending in favor of a gubernatorial candidate who opposed same-sex marriage.
In my more than two decades of work on runaway executive pay, sparking public outrage has never been the problem. The real challenge has been persuading the public there's something we can do about it.
With payments out in the open, citizens can hold their governments accountable for how they spend payments, and companies can be held accountable for paying what is due. Armed with that information, activists can push for more of that money to be spent back in their communities.
Since the Supreme Court's decision in Citizens United more than five years ago, the potential for corporations to secretly spend shareholder money to influence elections has been an ever-increasing threat to investors. The investors the SEC is charged to protect have called on the agency to deal with this problem, but thus far Mary Jo White hasn't moved the rule forward.
Investment crowdfunding leaders will convene in Chicago next week to welcome the 96% of Americans who until now haven't been able to participate in this innovative new form of investing.
An explosive new blog post at AdvisorHub purports to quote a high-ranking Morgan Stanley executive deriding the notion that Wall Street would ever allow a real fiduciary standard to be applied to its business. The arrogant assumption that Wall Street runs Washington and the patent disregard for investor well-being give the alleged emails a convincing ring.
Arming the mid-size companies with a new funding channel might trigger the valuations hike further, imposing the notorious "bubble" the VCs like to talk about. Don't underestimate the power of billboards or TV commercials with investment offerings.