It’s Time for Equal Opportunity Securities Fraud

This story was brought about by this Fortune article if you’re interested in reading it.

So the general theme here is…that everyone should be allowed to commit securities fraud. Over the past 5+ years there’s been a general problem with IPOs tanking as they hit the market. There’s been a little bit of talk around that being a problem.

You see, companies go public for a few different reasons, mostly to raise capital or to allow private shareholders to make a quick exit. If companies don’t end up going public because they know the share price will plummet the second it hits the market, then there will be fewer IPOs and less movement in the markets in general, which is bad for the market because reasons.

The SEC’s Grand Plan

Well the SEC’s plan is broken into three different plans of attack, which are all…interesting, to say the least.

First they want to deregulate the disclosure process to cut down on the amount of time it takes to IPO. There’s a whole lot of documentation around going public to give investors as good of a financial picture as possible before choosing to buy the stock at IPO. By deregulating the disclosure process, there’s less that needs to be revealed to investors ahead of time. In essence: companies don’t need to give as full of a financial picture before going public. Sounds great.

Then they want to ease the risk of securities litigation. Translation: make it harder to sue companies when something isn’t disclosed as a result of the reduced disclosure regulations. So that works out, I guess.

Lastly, there’s a “concern” about “politicized shareholder activists” which we all know means that they’re concerned about “woke”. I’ll leave it at that.

Overall

Yeah so this basically seems like a plan to make it easier for companies to IPO by stripping the protections for investors and stopping people from actually having a say in what the company does. Ultimately this serves to make rich people more rich by allowing them to make their stock riskier and making it harder to hold them accountable.

This general sentiment is, well, par for the course with the current administration and this is not going to be a good future for investors. This means that everything from your retirement accounts to the global financial market as a whole is going to be just that much riskier. Hooray for capitalism.