If the law was really about "protecting people", then gambling and the lottery would also be illegal.
Also, why can't I sign a paper saying I accept the risk of investing? Why can't I become an accredited investor by passing a class? I can pass a series of classes to become an EMT and be trusted with peoples lives, but no classes are sufficient to educate me about investing in startups.
When you look at how the accredited investor laws are structured, its clearly meant lock the middle class out of the market
You can! All you have to do is lie on your affadavit of accredition, granting you the two things you want: (1) investment in the venture, to (2) no ability to file criminal charges on the venture management if you get fleeced. You do want both of those, right?
https://www.worldcasinodirectory.com/united-states/map
And aren't states mostly the beneficiaries of lotteries? Here the revenue is supposed to go to schools or something.
I'm not going to deny there are many casinos (there are plenty) but the OP's statement of "gambling and the lottery would also be illegal" seems to miss that in probably the vast majority of the US, gambling and operating lotteries is illegal. For example, Texas recently had to have a constitutional amendment to allow sports teams to hold charitable raffles.
https://ballotpedia.org/Texas_Proposition_5,_Definition_of_P...
I agree it's not a perfect system and people who want to can find other ways to throw away their money. But we're probably not guilty of over-regulating financial markets in general.
I think it's a great system. But I also hate poor people and don't want them to have the same opportunities I have. Let them play the lottery instead right?
[ADDED: In case anyone missed the sarcasm I'm not a huge fan of state lotteries because they target the people who can least afford them. That said, I realize many buyers would go the less regulated route if they didn't exist.]
Neither could employees that have access to internal financials. You could believe your company is doing great, but you cannot invest. You dont have the chance to compete for the resource with the investors that can.
This also means less money goes into investment.
Result:
- Qualified investors get higher returns - Employees get lower wages because there is less capital invested - Founders get less money - Fewer startups are created
In the name of protecting compulsive gamblers?
Actually, for non-startups (i.e., 99% of new businesses), loans from banks, family, and friends, are the primary form of investment. This method of investing does not require the investor to be accredited.
Neither could employees that have access to internal financials.
Investors are also not entitled to internal financials. They might have a right to financial statement, but those are very different things.
Employees get lower wages because there is less capital invested
If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference.
Founders get less money In the real world, founders borrow money, which forces them to be calculating and spendthrift with their cash.
Fewer startups are created
Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little.
Precisely because its illegal to do it otherwise..you are making my case for me with this statement.
> If the increased capital is coming from employees, then this is just a circular transaction: the money goes from the employee, to the company, back to the employee again = no net financial difference.
It could be divested from other less profitable capital investments like index funds, real estate or straight down cash. That lower competition of capital for startups means less startups and thus lower wages.
> Oh no! Juicero would never have existed!...Wait, that's a good thing, and the very existence of Juicero and other wasteful startups suggests that the problem is too much capital, not too little.
Thats your opinion, but you are making a comment on a site run by an institution whose primary goal is to make more startups.
Also, the people applying for home loans weren't compulsive gamblers. The banks literally told them they were qualified.
Put it up to a vote and the vast majority will do away with these restrictions. The people don't want it. Some people want it, and some people benefit from it. As its usual in economics, those groups are not the same.
"Financial protections" => the government collects a tax to impose a restriction on you, to benefit the richest class.
Does that also apply to "democratic" processes?
Should only "accredited citizens" have the right to vote?
Having to pass a test to demonstrate you understand the policy choices and how they affect you could be a good idea if done impartially.
But to the point, categorical denial of access to a participatory space -- here based on your bank balance -- is akin to denying voting rights based on gender or color.