Goldman Sachs’ blatant attempt to circumvent securities law that divides private and public markets shows why more regulation in the US won’t work. The Securities and Exchange Commission is already incapable of enforcing current regulations, how could they possibly handle more responsibility?
The securities law is crystal clear that when the shareholders of a private company exceed 500 “record holders”, the company has to register with the SEC. Goldman Sachs, acting as if they won’t be keeping records of the holders of Facebook shares, claim their Facebook fund is a single holder. If the SEC was even just a little bit credible, Goldman wouldn’t even think about raising this issue. What does the SEC do? They go after small peddlers who make a couple of thousands of dollars through some questionable form of insider trading. Remember the $22 K guy? When it comes to real players that the SEC is supposed to regulate, the SEC is publicly ridiculed by these too-big-to-fail (TBTF) market players who skirt regulations at every opportunity.
US capital markets don’t need more regulation. They need people who understand the true meaning of regulations and be brave enough to go after the big players who wreak havoc on the entire market.