Poliwogg’s Simon: ‘Self-Appointed’ Nannies Blocking Americans from Becoming Investors

Monday, 04 Mar 2013 07:47 AM

By Michael Kling

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“Self-appointed” nannies are blocking Americans from joining Wall Street and becoming investors, charges Greg Simon, CEO of Poliwogg, a firm formed to raise investments for start-ups.

The Jumpstart Our Business Startups (JOBS) Act allows non-accredited investors to invest part of their income in start-up companies and permits companies trying to raise funding to advertise to the public.

The Act would let millions of Americans “cross Wall Street” by becoming investors instead of borrowers and would help energize the economy by helping to increase funding for start-ups, Simon writes on his blog.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

However, opponents blocked the Securities and Exchange Commission (SEC) from publishing regulations detailing how the law would go into effect, according to Simon.

“The self-appointed protectors argue that allowing investors to learn of opportunities to invest in private companies is bad for them. After all, they might invest and lose all their money.”

By that logic, we should prohibit advertising of investments in public companies since investors can lose their money. Nor should we permit car advertising since people can die in car crashes. Or ads for government-sponsored lotteries. The odds of winning in a private company investment, he says, are much higher than are the odds of winning the lotto.

Simon took aim at Barbara Roper of the Consumer Federation of America who, he says, has stated that those with incomes of $200,000 are not financially sophisticated or wealthy enough to withstand losses.

“Well, just how rich should you have to be to risk your own money investing in new businesses?” Simon asks. And why should the government stop you from making money in a new company and not stop you from gambling it away?

“Why, Ms. Roper, is that OK but investing in the private economy somehow requires being one of the ‘1 percent’ of wealthiest Americans?”

The SEC needs to “do its job, not repeal administratively what Congress enacted and the president signed and stop listening to people who think we need investing nannies to keep us from crossing Wall Street from the borrower side to the investor side,” he writes.

In an article for The Huffington Post, Roper argues that removing the marketing ban increases the risk of fraud. Many securities experts, institutional investors, regulators and others believe the SEC’s pending rules do not do enough to protect investors against fraud and are urging the agency to revise its proposal.

Divided on the issue, SEC commissioners seem stuck in a stalemate, Roper says. Judging from her public comments, SEC Chairman Elisse Walter realizes the current proposal is inadequate.

“Not only would approving the current proposal be bad policy, doing so would also be appallingly bad strategy,” Roper argues.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

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