I Would Like to Hire a Few Lobbyists…and Thanks Stevie Cohen for This Tipping Point in Securities Law Reform!

Congrats Stevie Cohen who has joined the ranks of Jon Corzine for buying off the US Government. The message I get is if you are going to cheat, cheat big, really big, because you can afford to buy your way out.

I am pretty confident that Stevie will walk away but a ‘tipping point’ is firmly underway now for the social web and financial markets.

Now it is really time to lean into The 1929 Securities Act which is a shambles. Let’s forget the date of it for a moment or the name.

You can’t protect the few, especially where money is concerned, with the government or an underfunded, understaffed SEC.

In the age of social, where at least everything is documented (you can’t delete messages on Stocktwits), you can protect the masses against the criminals by allowing them access to the sources. The sources are people. In the era of smartphones, private text networks, Twitter, Stocktwits, Facebook, BBM the only rational thing to do is to relax insider trading rules. The trend is unstoppable.

If Elon Musk wants to say he is excited about an announcement Thursday, let him. He will either way, no matter how much you fine him. Is he breaking 1929 rules? If he is, is it better he says he is excited ONLY to Stevie Cohen only because Stevie or one of his cohorts has a lunch with him?

I follow Elon Musk. I don’t see all his messages the moment he sends them but enough people do. Elon’s message sent the stock up. I own the stock. I did not rush to buy more or sell mine on the announcement. I went to read his message and made a few calls and followed the Stocktwits stream and links to listen in to the message getting digested.

I am confident that Elon did not intend for his uncle or aunt to make money. He is using the tools of the day, which are now entrenched to express some excitement. Lets even call it promotion. If you chase promotion, you might just lose money. That’s all. Have you ever watched CNBC hype a segment before a commercial?

I have pitched financials firms hundreds of times (since Wallstrip in 2006) regarding the social web and the people web. It’s the same pitch…the walls are coming down, just faster than ever. Get in front of it with the streams of the social web. Streams that add context with the people behind the messages and the timeline that exists alongside.

The lawyers step in every time and talk about the outlier. The outlier is always this unsophisticated 80 year old person that buys a stock because he/she saw a message from a random person on a network not controlled by the brokerage and loses money.

The Public Company lawyers talk about REG FD (fair disclosure) and press releases and process.

It’s all bunk. The individual investor has easy access to CEO’s, networks, media and information that is many times better and way more efficient than hedge funds. Individuals hardly buy stocks anyway…the ETF and passive investment explosion has been long underway. I would argue with these trends, the laws are costing us more than ever today. The passive ETF managers could give a rat’s ass about inside information because they are just asset gatherers and rebalancers.

We are now only protecting hedge funds and criminals with the ancient laws. The criminals have gotten richer than ever, more powerful than ever, powerful enough to write $600 million checks.

Technology that puts a little bit of power (access, speed, knowledge) in the hands of the rest of us is being ignored, held back at key levels of distribution and ownership, even ridiculed. I will continue to peck away and wait it out reading our tape on Stocktwits, and pitching the powers of the social web as a tool of good for the financial markets.


    • weissben says:

      Ultimately, free information exchange will win the day, as it already has in traditional media, where Twitter, blog networks, etc. have replaced the traditional beat reporter. Companies are already putting out tremendous amounts of content with financial implications, only its managed by the CMO and the executive suite, not the IR or Legal departments.

      The key question for investors is how do you either get Elon to publish to Stocktwits (self-filter), smartly filter his published content with financial relevance from elsewhere, or remove the filter, and assume all his messages have market moving potential (e.g. pull it all in).

      I believe FINRA will be overwhelmed by tweets, blogging, etc of financial significance, generated by the companies and specifically senior executives, and ultimately require that all content put out by the company across these media be searchable for financial purposes (e.g. the no filter option).

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