My main gripe with the whole "accredited investor" thing is that its literally legalized classism (and I'd argue a violation of the equal protection doctrine, but that's another theory), as the income requirements eliminate a huge swathe of investing for anyone but the 1%.
Nothing is stopping an uninformed investor from loading their net worth into a single reuglar stock (you know, those perfectly safe instruments that never ever lose their value and leave you with nothing), so I really, truly don't see what these requirements are protecting anyone from, or why that protection is necessary.
If it's really about protection, then education and nondiscriminatory licensing based on testable knowledge would fill that goal, but instead we have income minimums.
These laws came about from very real and serious experiences that were, in fact, catastrophic for many communities. It's a real live problem, and it goes back a long way.
If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here.
You can also do the "who cares if people want to get swindled let them" approach, but recognize that you've been outvoted on this topic, we've decided to protect people like we try to protect people from unsafe food, consumer products scams, and many other situations.
I think it is understood that the regulations are in place to mitigate risk for the most vulnerable. Whether this has been the right implementation (income vs some other means) is what I think OP was getting at.
>>If you want to argue about the details that's great, but any discussion has to start with the reality that an unregulated market leads to really unwanted outcomes here.
Are you saying that the discussion has to start from the premise that on the balance, the outcome of unregulated markets is less desirable than that of a regulated market? Because I would strongly contest that premise.
Then it's a good thing nobody here, least of all me, asked for "unregulated markets". Literally your entire post is either responding to points I didn't make, or makes arguments I already addressed, making this exchange a complete waste of time for both of us.
Diligencing private securities is expensive. Getting information is expensive, the legal work is expensive, the negotiations are expensive. This is fundamental to the lack of reporting requirements and standardisation. Small checks simply don’t make sense in these markets.
It’s worth noting that absolutely nobody is confused about there being demand for highly speculative investment in small sketchy seed stage companies.
That demand has been around, literally, for hundreds of years. The entire point of this category of securities laws is to prevent people from meeting that demand, since doing so tends to have disastrous outcomes.