[wyager]

Why should people on wall street be forbidden from doing whatever investments they want to, insofar as they are contractually allowed? If you don't like how someone is investing, don't invest with them. If you think certain banks are behaving riskilly, don't give them your money. What are some counter-arguments to this? I.e. why is it a) moral and b) desirable to regulate the activity of wall street traders in addition to the laws they are automatically subject to (like anti-fraud laws)?

[karl_gluck]

The argument is actually fairly simple: behaviors that have been known to cause fraudulent or deceptive activity in the past are placed under more scrutiny or outright banned.

For example, it becomes quite easy to hide fraud when a single entity is both an investment bank and a mortgage lender.

In my layman's opinion, a lot of the problem comes from the fact that accounting is not an exact science. For a large company with many revenue, expenditure and investment streams spread over the course of a year, accountants have a lot of leeway to massage the numbers as they see fit. Until the house of cards comes crashing down ala 2008 it can be very hard to pick apart what is actually going on from the outside.

[pyoung]

I would imagine most of the laws and regulations are anti-fraud in nature. Outside of that, limiting the risk exposure of banks that carry FDIC insurance, or some other government backing, is in the interest in of all taxpayers. From my laymen's understanding, if you want to start a hedge fund, take some rich people's money, and gamble it all away, nothing is really stopping you. In fact people do it all the time.

[eric_bullington]

>take some rich people's money

And there lies the rub. So the wealthy man can take advantage of start-up investing, but the government in its infinite wisdom, forbids the middle-class man from doing the same under penalty of imprisonment for the person offering the security.

[smacktoward]

Yes, it is truly a moral imperative that we allow people who can't afford to be ripped off access to the same "investment opportunities" as people who can.

Freeeeeeeedom!

[wlphoenix]

I'd argue that those sort of investments would be better gated by knowledge than available finances. There's no reason a early employ that made <$1m in a buyout shouldn't be allowed to invest 10k in another startup. He absolutely knows what he's investing in, and it's his choice if he's willing to take that risk.

[wyager]

You know how people always complain about the rich getting richer? That frequently happens because they're given exclusive access to those "rip-offs" you're claiming average people should be excluded from.

[seanflyon]

We let them get payday loans and credit card debt, but when it comes to something that is generally in their best interest, we must step in and save them from themselves?