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Joel Friedland Comment On Regulatory Notice 22-08

JOEL FRIEDLAND
N/A

I have been contacted by a website called "Let Everyone Invest" that says under the regulations being considered by the Financial Industry Regulatory Authority (FINRA), if these public securities are deemed to be complex, you may not be able to buy them unless you: Pass a regulator-imposed test of your specialized investment knowledge Demonstrate a high net worth Get special approval from your broker Attest to reading certain materials Go through cooling off periods during which you cant invest. I agree that FINRA should do all that and more.. Many people are speculating, not investing, in financial products they do not understand. They need to be protected. The most extreme example of this were structured financial products designed to be held in the IRA's of wery wealthy individuals; mainly created by morgan stanley and goldman sachs that came out at the market bottom in 2008 and 2009.. The financial products promised a good return for 10 years if things went right, but an awful lot had to go right for the investors to come out ahead. The financial products were created to transfer the risks the investment banks took on when they sold "collars" to pension plans and trust departments. Investors PAID for the right to absorb the risks the investment bank had taken on and gave up any potential outsize returns. In most of these, investors received roughly double the ten year treasury yield for ten years, and accepted the possible loss of up to 80% of the capital invested. I am very sure NONE of the full service brokers who sold these products understood what they were selling and none of the investors knew what they were buying. I read the prospectus of one of these things thoroughly. It just got curiousier.