While this rule proposal will likely not attract nearly the same degree of attention as the ETF Rule amendments, it is very significant and deserves careful review. The SEC has the difficult problem of (i) allowing for market trading of companies that are too small to be listed on an exchange, while (ii) discouraging fraudulent activity in the securities of these companies. The greater the restrictions that the SEC imposes on trading to prevent fraud, the more that the SEC raises the costs…

The new rule is consistent with the SEC's permitting general selling efforts in private placements, provided that the buyers are all determined to be accredited investors. By this action, the SEC is focusing less on process and more on the end result; ultimately, the test will be whether the disclosure is good.

It is a fundamental law of financial regulation that any regulation applied to equity securities eventually must be applied to all other asset classes. The only variable is the extent of the delay. This is not to say, as Commissioner Roisman observes, that the application of the equity rules is fundamentally good or bad in any particular situation - only that it is inevitable, at least on a big-picture level.

In the case of government securities, broker-dealers in those instruments…

Whether the baggage handler lost money on behalf of his clients was not noted in the enforcement release. Perhaps he made money on behalf of his clients. Perhaps he beat the market. The SEC's Order does not suggest that he stole from his clients. There might be a movie in this.