- In his opinion, the SEC is like Quickbooks for financial regulation.
- Cuban stated that Howey was insufficient, thus Reves was introduced.
The owner of the Dallas Mavericks NBA franchise and Shark Tank star Mark Cuban took to social media on Thursday to criticize the U.S SEC. According to Cuban, when questioned about the suitability of current securities rules to regulate cryptocurrencies, all one has to know is that Howey was insufficient, thus Reves was introduced.
A case that pertains to the Securities Act of 1933’s definition of an “investment contract” is Reves v. Ernst & Young, which was heard by the Supreme Court. In his opinion, the SEC is like Quickbooks for financial regulation. While they excel at maintaining records, they fail to safeguard anybody.
Severe Criticism
In addition, the Shark Tank investor raised the issue of whether the SEC had ever intervened to safeguard investors prior to negative events.
Cuban further added:
“It’s also nice to know that if the SEC had taken the same path as Japan and required collateral for crypto loans, all the bankrupt crypto services would still be alive. Just as FTX Japan is.”
The billionaire emphasized, “the SEC has never stepped in to stop the fraud,” while mentioning that he supported and benefitted from Sharesleuth, which finds blatantly fake firms and publishes what has been uncovered. Discovering securities fraud and corporate wrongdoing is the only mission of the investigative reporting website Sharesleuth.
As Cuban pointed out, the Pink Sheets and OTC markets are still vulnerable to fraud notwithstanding registration, and there are protections in place to protect the millions and billions of shares traded in insolvent firms, which the SEC fails to address. Because, as per Cuban, it’s clear that registration is sufficient to safeguard investors.
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