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June 3, 2020

SEC Proposal Would Expose Investors to Dangerous Financial Products and Enable Companies in China, Other Countries to Raise Millions from U.S. Retailers

Wednesday, June 3, 2020

Contact: or 202-618-6433

Washington, D.C. – Lev Bagramian, Senior Securities Policy Advisor with Better Markets, issued the following statement on Better Markets’ comment letter about the Securities and Exchange Commission’s latest efforts to further deregulate capital markets:
“The SEC’s proposal would enable foreign companies—including companies domesticated in China with questionable accounting practices—to raise hundreds of millions of dollars a year from U.S. investors without providing audited financial statements.
“As we highlight in our comment letter and fact sheet, this is just one of the many dangerous changes the SEC has proposed in the so-called “access to capital” proposal. Previously, the Commission proposed a concept release presaging some of these ideas. We submitted a comment letter on that concept release in late 2019, and we also submitted a comment letter earlier this year in response to the separate rule proposal to amend the definition of Accredited Investor. Together, these proposals amount to the most dangerous weakening of safeguards put in place since the Great Depression.
“These proposals—sold in the name of capital formation—would expose financially unsophisticated retail investors to the risks of investing in companies that have funding challenges and prefer to not disclose information about their financial condition or growth prospects.  Exposing these retail investors, who often lack the financial sophistication to understand risks associated with investing in dark private markets and/or lack the financial wherewithal to withstand higher-than-normal probability of investment loss, is contrary to the founding principles of the Commission. These proposals—marketed in the name of increasing investment opportunities for retail investors—would, more often than not, enable intermediaries to reap huge commissions by peddling unsuitable investment products to unsuspecting investors and allow companies and their executives to plunder the hard-earned savings of ordinary Americans with no real benefit of sensible and sustainable economic growth. 
“We are left to conclude that the Commission has naively bought the hype peddled by intermediaries who stand to benefit from the rents in their role as middle-men between investors and so-called entrepreneurs who often engage in job destruction and wasting of assets than job creation and economic vibrancy. We fear the Commission’s decisions risk dismantling the regulatory pillars upon which the Commission has stood for nearly 70 years.”


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit
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