[paul]

On the other hand, the .com bubble was driven in large part by the ability of VCs to flip junk onto naive retail investors.

The fact that venture investors now need to wait many years for an exit (and the startups can really only access institutional capital during that time) helps keep things a lot more grounded in my opinion (though I'm sure many will disagree).

[gfodor]

Don't worry, the SEC will eventually fully open the doors to retail investors investing in private equity. Imagine the bubble when the companies don't even have to disclose the bad news!

[paul]

Yeah, I'm not convinced that's a good idea, but I think they are at least putting some extra limits in place so that they won't gamble their whole 401k away.

[gfodor]

They say Americans learn about geography though war -- I'm going to say they learn about economics through financial crises. Most people don't understand private equity markets (like they didn't understand CDS's, etc) so it's certainly in the list of contenders for the next crisis.

[davmre]

I'd wager most people don't understand CDS's even now.

[tsotha]

Even professionals in the industry don't understand CDS's. Some of them are deliberately complicated.

[ScottBurson]

I should have clarified that I don't think that SOX is totally a bad thing. It's just that the problem it's addressing is an exceedingly difficult one; it's not too surprising that unintended consequences should crop up. I do suspect this is an indication that SOX went somewhat too far, though.