Famous billionaire Mark Cuban believes that the US Securities and Exchange Commission (SEC) is failing to effectively protect investors.
The Shark Tank star refers to the SEC as “the QuickBooks of Financial Regulation.”
“They don’t protect anyone, but they are very good at accounting. Has the SEC ever stepped in to protect investors BEFORE something bad happened?
I have supported and benefited from Sharesleuth.com by identifying clearly fraudulent companies and publishing what we found.
The SEC NEVER intervened to stop the fraud, including one company that we showed had no power over their activities but did issue releases. LOL.”
Sharesleuth.com, which Cuban owns, publishes investigations examining fraud and deceit by publicly traded companies and their executives.
Cuban is also calling for new securities laws for crypto assets.
“All you need to know is that Howey wasn’t enough to cover every situation, so Reves came along.
Now there is a need for a crypto complement to Howey and Reves.
It’s also nice to know that if the SEC had followed the same path as Japan and required collateral for crypto loans, all the bankrupt crypto services would still exist. Just like FTX is Japan.”
The Howey test is a legal criterion often cited to determine whether or not a transaction qualifies as an investment contract. According to the test, an investment contract is “a contract, transaction or arrangement whereby a person invests his money in a common enterprise and is led to expect profit solely from the efforts of the promoter or a third party.”
The Reves test focuses on whether a financial instrument or offering is a security, according to SIMFA, a trade association for broker-dealers, investment banks and asset managers operating in the U.S. and abroad.
The trade association explains
“The Reves Test identifies four factors, the balance of which can indicate whether or not a banknote is a security. They are: 1) the motivations of the buyer and seller, 2) the distribution plan, 3) the reasonable expectations of the investing public, and 4) any risk mitigation considerations.
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