Jul 20, 2009
As soon as some of the biggest banks announced that they would not accept California IOUs, a new breed of “entrepreneurs” sprang up on the internet: wannabe loan sharks offering to buy IOUs, hoping to cash in on the high, tax-free interest the state is promising.
“Not so fast,” said the SEC (Securities and Exchange Commission), the federal agency that is supposed to regulate financial markets. The SEC declared the IOUs “securities,” meaning that only dealers registered with the SEC would be allowed to profit from them.
The SEC says it is only trying to protect the public from getting ripped off by loan sharks.
Ridiculous! The big sharks, who call themselves “investment firms,” have been ripping off the public for years in broad daylight, with all kinds of fraudulent scams passing as “securities.” Apparently they just want to control this latest ripoff!