Tuesday, October 17, 2006

Massive Increase In Reg D Fraud?

Dan Jamieson over at InvestmentNews has an interesting article on an alleged increase in securities fraud, where the scanners are using Reg D to add legitimacy to fraudulent offerings.

The article contains a number of quotes from state securities regulators who are bemoaning the fact that they can no longer require a merit review of offerings in their state, which they claim is leading to an increase in fraud. NSMIA pre-empted state merit review of offerings, leaving the SEC as the only entity with the authority to review the offerings.

Also of interest are various comments regarding the inability of the SEC to conduct any review of those offerings, citing staffing and budget concerns.

And Congress wants to have them review hedge funds? The SEC is understaffed as it is, and unable to perform its function. Congress keeps adding responsibility, without funding, all to the detriment of investors, and the markets.
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