SEC: No Stocks Allowed on Ebay 47
Rude Turnip writes "What won't people try to sell on Ebay? First it was 16 year old girls, then the planet earth then Ebay itself! In the latest round of auction hijinks, the SEC has issued a cease and desist order to prevent three people from selling *gasp* stocks on the popular auction site. Apparently, the individuals violated some regulations having to do with the sale of unregistered stock. Was this the case of another online investment scam or a bona fide attempt to conduct corporate finance in cyberspace? CNNfn has the scoop. "
Fix it. (Score:1)
What about *foreign* stock? (Score:1)
Or if they do, what about non-US stock on non-US acution sites?
Re:Big brother is watching you (Score:1)
Since when does a company searching ebay for "Stock for sale" or "Company for sale" read your email.
Not all surveillance is underhand.
Re:This isn't as bad as it looks... (Score:1)
> a bunch of stocks anonymously before the
> quarterly report goes out...
Oh, yes, just like what the COREL head-honcho did a while back, and for which he is now under scrutiny...
-- ----------------------------------------------
Vive le logiciel... Libre!!!
Re:Let's not forget what a stock market is (Score:1)
Indeed. The 1929 crash precipitated the bulk of the regulation, leading to the formation of the National Association of Securities Dealers (NASD). In conjunction with the SEC, they are charged with making sure such a crash, generally understood to be a Bad Thing for Everybody Worldwide, cannot recur. The NASD licenses all securities dealers in the USA, and the examinations are not trivial.
Well, the NASDAQ is very, maybe too closely affiliated with NASD. However, the competition between the different exchanges is fierce, and could well lead to newer technology being utilized to achieve competitive advantage, just like NASDAQ revolutionized over-the-counter trading with its computerized "stock floor." But due to the stakes of worldwide economic stability, you can be really sure such developments will occur within the existing regulatory frameworks.
Re:makes sense. (Score:1)
And if you already own at least 1 share in a corporation, that corporation can usually sell you additional shares directly without a broker being involved (though not all corporations elect to do this).
Re:What about *foreign* stock? (Score:1)
Re:Big brother is watching you (Score:1)
That was my first thought as well. But after a bit of consideration I began to wonder if this is actually the case. "Stock for sale" or "company for sale" are specific phrases, and ones that would be hard to search for; when you consider not just variations of the phrase but the scale of the search operations (they can't just be checking ebay) something begins to smell fishy.
I don't think it is a conspiracy-level snooping operation, but I would like to know how they found out.
Re:I think that the SEC should wake up... (Score:1)
For years we've been clamouring for equal opportunity for the internet; if it's allowed IRL it should on the internet. If this were true encryption, censorship and pretty much everything would be lovely.
Conversely, if it's not allowed in meatspace, its shouldn't be allowed in cyberspace (whether it should be disallowed in the first place is another argument). The SEC stops scam artists (to a certain extent), and this has to be done in (another metaphor for outdoors) as well as cyberspace.
The Actual Reason for the Pull (Score:1)
If it would have been EBay stock, or Intel, Microsoft, Johnson & Johnson, or any other publicly traded company then the SEC probably wouldn't have intervened unless it was sold for more than the present market value.
Andy
Why the extreme bias against the SEC? (Score:1)
This was a scam and illegal, even if the internet wasn't involved. In at least one case, the person offering to sell stock in the company, had no actual incorporation. That means that the stock didn't exist. "Corporate finance in cyberspace"? Give me a break.
To sell securities, anywhere , you must comply with certain simple regulations. In plain english here are some of the things they did wrong:
- Did not have a corporate entity (You can't sell shares in a partnership)
- Made outragreous claims (aka lies)
- Did not disclose that the sale would be for a restricted unregistered security
- Committed out and out fraud
I could go on with this list, but it's pretty obvious that all three of these acts were not about "corporate finance". Of course there are hundred of "paper cut" regulations that you still have to abide by in selling registered securities, or when generally soliciting, but that isn't what we are talking about here.The sad thing is that as a result of these three, eBay has been closed off as an avenue for the sale of companies that are planning legitimate registered offerings.
The implications that the SEC is anti-internet that I see both in this post and in many of the replies are just puzzling. They have been bending over backwards with things like the U7 to make sure that small companies aren't shut out of public fund raising. They have been issuing No Action letters left and right for things like NIPHIX, and rule504. I guess a lot of this is just left over venom from those shutout from Red Hat.
With all the slamming that takes place on the securties market of late here on /. , how about Slashdot invites someone like Richard Wulff for an interview?
Re:"How much for the little girl?" (Score:1)
Re:The moon and the stars (Score:1)
Sorry, but I already put dibs on the moon and the stars when I promised them to my girlfriend one night.
_Big_ Money is Involved (Score:1)
On ebay, the price the seller sells is the price the buyer buys.
On the markets the market makers get a piece of the action. (e.g. for each share - Seller sells for $9.95, Buyer buys at $10.00, Market maker makes $0.05 risk-free)
This is why its possible to make commission-free trades.
This is BIG money for the guys in the funny-looking jackets, so it is in their interest keep it to themselves.
Also, getting a company to go public or selling a large portion of a company also involves a big profit margin.
Re:This isn't as bad as it looks... (Score:1)
If a wealthy individual wanted to do this they could as the system stands now. All they would have to do is to open up X off-shore trusts/accounts/companies, have each one buy 3% of the company shares. The individual owns 3xX% of the company and never has to report anything.
>possibly the biggest nightmare this would open up for the SEC (and insider traders everywhere) would be a 24hour market
There _is_ already a 24 hour market. SP futures trade all the time. Instinet offers afterhours trading. European/Japanese markets are open during our after-hours.
>the big boys would no longer have the edge over the rest of us, knowing exactly where a stock will open at the next day.
Then why are the major markets (NYSE, NASDAQ) extending their hours? I don't think that they know anymore what the market is going to open up at than what the SP futures will tell you.
Re:Unregistered stocks (Score:1)
Good point.
>Disclosure documents may often be close to indecipherable, but experts should be able to interpret them at least.
How would that help? If I was buying part of a company in a private transaction I would at least get a lawyer to look at it, if not my accountant, to make sure I'm not getting screwed.
>Selling stock in new or unkinown corporations, with no approved disclosure documentation, in a forum of largely clueless buyers is not a good thing.
Most stock traders _are_ clueless, even if they have the documentation. Either they don't read it at all or ignore the important parts for the exciting parts (e.g. - Planet Hollywood)
"Everytime a trade is made, someone is wrong."
Re:Bad idea all around (Score:1)
Form what I've read from the SEC, I don't think they would actually care about legitimate sales of legitimate stocks on eBay. All three of these cases, however, were not legitimate.
The SEC is prosecuting for selling stock that would be just as illegal if sold by any other means.
eBay has "outlawed" all sale of stock through their site, because there's no way they could keep up with what is, and what is not a legal sale.
It looks like everyone's doing their job pretty well IMHO.
The moon and the stars (Score:1)
What the heck is this echeleon thing everybody's talking about? Is the NSA auctioning it on eBay?
Re:Spring Street Brewing Company and Common Stock (Score:1)
http://www.wired.com/wired/ar chive/6.02/wallstreet.html [wired.com]
numb
?syntax error
Shame on eBay (Score:1)
Would someone sell a kidney or organs on eBay? How about Urianium? How about drugs? The problem is that eBay take almost no responsiblity for what it features. Sotheby's and Christie's would always take the time to inspect the auctioned lots to make sure that the sale is legal...why doesn't eBay?
eBAY is creating theyre own demise (Score:1)
What's really important (Score:1)
Re:This isn't as bad as it looks... (Score:1)
Back in the day... (Score:1)
SL33ZE, MCSD
em: joedipshit@hotmail.com
Re:Big brother is watching you (Score:2)
I see nothing fishy about SEC's actions. (IMO, they are one of the few least-internet savvy government braches, if they've basically taken action against Ebay just now).
Unleashing millions? (Score:2)
The only difference between then, and now, is that you can do it with a point and click interface instead of a highly-compensated broker in the middle. Nevertheless, this simple change has largely fueled the stock boom of the last several years, leading to price inflation and a more volatile market. And a lot of uneducated investors losing money, too.
The difference between a stock trade done via Etrade and a stock trade done with Joe Blow via Ebay is that the former is a licensed broker with the proper oversight and communication so that the stock trade is registered correctly and honestly. It's one thing to privately sell your brother some stock; it's another thing to buy stock from somebody you don't know on the other side of the country. The securities markets are highly regulated for good reason, and knee-jerk "nanny-state" responses are simply ignorant. Without oversight, the little investor is blindsided by insider trading and price scams.
There is nothing in the regulations that prevents you or I from buying the stocks we want; it prevents abuses.
The most important shift in the stock market in the last generation, by the way, has been the 401(k) plan: an artifact of an obscure banking regulation that turned out to permit employer-managed tax-deferred investment, which since its creation in the early 80s has poured $billions into the stock market. There are more stock owners today than there ever have been, and with mutual funds and IRAs and the like the obstacles to stock ownership are few indeed. And you call this a "nanny state"?
----
Lake Effect [wwa.com], a weblog
Big brother is watching you (Score:2)
"regular surveillance of securities trading activity in cyberspace"
they found this? I appreciate the fact that it might be prudent in terms of stock trading, but what next? As part of their regular surveillance, they'll read my mail too perhaps. Mmmmf. Same old same old.--Remove SPAM from my address to mail me
Sales of "other" items (on request) (Score:2)
Here are lots of things that show up... my buddies and I once posted one of our girlfrineds as "One Captive Girl"... things like that don't get pulled until they are pointed out, ours was "offensive" (our sale [uswest.net])
A
Spring Street Brewing Company and Common Stock (Score:2)
IIRC this led to him setting up an online trading system with genuine "fake" stock certificates that he would send out to patrons of the system--clearly stated that it was for entertainment purposes.
Last I heard he was being hounded by the SEC. This was quite a while ago, but I was able to find the links on Yahoo's index where it mentions the "common stock" thing--however his site makes absolutely no mention of it anymore except for a jpg somewhere that says "take stock in your beer."
http://search.yahoo.com/search?p=wit-tra de [yahoo.com]
Anyone else remember this story or know whatever happened to the guy? It says nothing about it on the site anymore. I know theres quite a bit more to the story, but honestly I can't remember the rest.
numb
I'd love to sit at a bar for a couple hours with the President and get bombed. I have a feeling he's the type of dude that really knows how to party.
?syntax error
Bad idea all around (Score:2)
Stock auctioning in an environment where the auction runs a couple of days is very risky. No sensible bidder will bid more than the national market price. However, if the stock price drops before the auction ends, the seller will make out nicely. It's like the bank-end of shortselling, and a nasty gamble for the buyer. Again, I understand why eBay wouldn't want this taking place.
What I don't get (help me out here) is why the SEC is involved. Does this mean that I can't sell my stock certificates to anybody I want to?
I personally think the SEC was camping eBay, waiting for someone to try and sell stock. Why else would it be noticed so quickly?
I think that the SEC should wake up... (Score:3)
On a different note, can anyone post an url to a story about the attempted 16-yr old sale?
Let's not forget what a stock market is (Score:3)
IANA-stock-market-historian, but it appears the SEC and regulation were basically regulatory mechanisms that arose into place to prevent abuses occurring during this transaction. Somehow, regulatory mechanisms have a way of becoming default laws, irrespective of how relevant they are.
It wouldn't surprise me if the stock market underwent as earth shaking a change as the retail world is undergoing, simply due to the unleashing of millions of people being able to freely trade with each other. It also wouldn't surprise me if the powers that be try to hold this back.
Of course, it's entirely possible that scams and unwholesome activities will run wild on the scary beast known as the "internet" (or "cyberspace" for the buzzword impaired). But ultimately, I think the reins will be lost. And ultimately, massive dergulation may be more productive than well-intentioned regulation.
Of course, it won't be idiot proof or conducive to a nanny-state. Any bets on how long it will be before a pensioned school teacher loses his life savings on e-bay stock trading?
L.
Unregistered stocks (Score:4)
Selling stock in new or unkinown corporations, with no approved disclosure documentation, in a forum of largely clueless buyers is not a good thing. By preventing it, the SEC is behaving responsibly. Not all government regulation is beneficial, perhaps, but knee-jerk opposition to legitimate consumer protection seems foolish.
Michael Kerpan
This isn't as bad as it looks... (Score:4)
We would also see instances of ceo's selling a bunch of stocks anonymously before the quarterly report goes out... (granted that could be monitored since the amount of their assets is public knowledge).
possibly the biggest nightmare this would open up for the SEC (and insider traders everywhere) would be a 24hour market (which i am all for). the big boys would no longer have the edge over the rest of us, knowing exactly where a stock will open at the next day. if they make the market 24/7 then nobody will sell stocks on ebay, since they can just as easily(and legally) sell on the market.
today's the 21st? i should mention echelon then, huh? i wonder how the nsa feels about the market?