Why the SEC Should be More Like the FDA
Elliot S. Weissbluth
“So the problem is not so much to see what nobody has yet seen, as to think what nobody has yet thought concerning that which everybody sees.” ― Arthur Schopenhauer
The FDA and the SEC hypothetically play the same role in our lives: to protect us from products that could harm us.
If you’re selling a new drug, you can't escape the strict oversight of the FDA. But if you’re selling a new investment product, you’ll have a much easier time getting it past the SEC. Prescription drugs must be safe and effective, but there is no law stating that investment products have to be effective. Or even that they have to be safe.
Why is that?
Imagine the FDA shrugging their shoulders after an unsafe drug caused death or injury to innocent people. Suppose the FDA said something similar to what we hear all the time from Wall Street:
"You should have done your research. We told you there was risk involved."
The public would be outraged—and rightfully so.
The FDA requires 12 steps to drug approval. Most drug products can’t pass the first three. If they do, they face three more trials. It can take years to get a safe, effective drug to market. But given the consequences of a poorly vetted drug, few of us would advocate eliminating steps to speed the trial process along.
The SEC, on the other hand, is under constant political pressure to shorten and eliminate their approval processes.
To further protect consumers, the FDA recalls approved drugs that are later found to be harmful to get them off the market (remember Fen-Phen?). The SEC can't—or won't—follow suit. They made virtually no effort to prosecute even the worst actors for their roles in the credit crisis of 2008. Further, they failed to pursue Bernie Madoff even though they had been informed of his scam long before he confessed.
The ultimate victim of the SEC’s inadequate oversight is the investor. Too many financial products, promising too much, come to market every day. Investors deserve to be protected by an SEC that takes our financial health as seriously as the FDA takes our physical health.
étudiant(e) (Pigier)
9 年Salut mr! Moi Ekressin j'aimerais postulé dans votre entreprise !!!!
Drive Your Dreams
9 年Bruno since you feel that China and a communist government does a better job than western countries, may be you should migrate to China and open your business there. Insulting western world as arrogant and blind is not a way to attract their investment capital. It's not necessarily the government's job to invest in businesses. Keep in mind your business is unproven there for an investor to invest they are speculating. Besides LinkedIn is not the place to find investors. A business must, crawl, walk then run. This is the way investors judge businesses, unless you have at least a couple successful exits like Elon Musk. Elliot makes very valid points and bad investment registered or not registered at the SEC can take someone's life savings by bad actors. That can lead to being homeless, penniless and even in some cases suicide. Not all investors are accredited, many are unsuspecting average person who might sink their whole life savings of $100,000 into a business. Many people will even borrow money to invest, being left in debt. On the other side, to get a FDA drug approved can take years and if it tooks years to get an investment approved, that you kill the ability of start-ups to raise capital.
Author/Speaker
9 年On 01-18-2011, I walked away from a dream corporate career to pursue my passion of adding value to lives worldwide. Followed with a price tag of loosing my home, cars, & all finances. It's never been about the money; genuine intent is to help others. The funds awarded me will be controlled by the best in the financial industry. "IT'S ALL GOOD" Love, Michael