This letter is to oppose each and every one of the extensive restrictions being contemplated in Regulatory Notice 22-08. The proposed rule should be revoked. It is the latest open attack on the common man’s access to the new class of leveraged products, and in so doing, it is illegal.
The original attack came from the SEC in late 2019. That proposed rule, File No. S7-24-15, which limited leveraged product sales to accredited investors, is the direct ancestor to this rule. The FINRA web site even cites it in providing the background for 22-08. At the time, my feedback to the SEC was that it did not have legal authority to issue such a rule. The federal government is not Constitutionally empowered to prohibit individuals from investing in lawful assets (though it can encourage or discourage investment through de-regulation). People have a right to invest however they want. The SEC seems to have realized this and decided to outsource the work to a private organization to get around this limitation.
The FINRA web site says that FINRA is Congressionally authorized in its activities, and the SEC backs FINRA’s rules. Because of its Congressional origins and the direct SEC (government) sponsorship of these efforts specifically and FINRA rules generally, FINRA is a government entity in a legal context in the sphere of regulating.
That makes this rule subject to legal challenge and strike-down by the courts on Constitutional grounds, including delegation of powers and Fifth Amendment due process violations.
The proposed regulation is also totalistic in its restrictions, ostensibly to intimidate opposition into bargaining and conceding on major points to prevent a worse outcome.
Two can play that game. From the background on options regulations described on FINRA’s web site, it looks like the original options regulations put in place in 1978 were not legal either, for the same reason elucidated above. The Supreme Court is in the process of throwing out decades-old jurisprudence that established a practical balance of power on abortion. We are in a new legal era. I don’t see why the playing field isn’t wide open on everything.
I also observe that just like the SEC’s proposed rule, the timing of this regulation is coincident with a stock market crash. This could be viewed as abuse of power and coercion, since a small net worth leveraged product investor might reasonably conclude it is better to sell everything during this prolonged crash and realize significant capital losses in order to preserve enough capital to be able pass a future wealth test, versus take a chance that the market may fall further and make him altogether ineligible to invest in the entire category because of low net worth. It would take years if not decades to recover with conventional assets the amount lost.
The back-to-back timing and context of these anti-leveraged product efforts appears tantamount to conspiracy of a nominally private organization with the government to deprive people of their rights.
And though government organizations are generally immune to consequences, private entities are not – even when acting as a government entity.
I strongly urge you to cease batting this hornet’s nest and allow your fellow human beings to live freely. Our civilization probably won’t maintain much longer anyway, and you don’t want to have enemies wandering around when it falls.
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Wendy Milling Comment On Regulatory Notice 22-08
This letter is to oppose each and every one of the extensive restrictions being contemplated in Regulatory Notice 22-08. The proposed rule should be revoked. It is the latest open attack on the common man’s access to the new class of leveraged products, and in so doing, it is illegal.
The original attack came from the SEC in late 2019. That proposed rule, File No. S7-24-15, which limited leveraged product sales to accredited investors, is the direct ancestor to this rule. The FINRA web site even cites it in providing the background for 22-08. At the time, my feedback to the SEC was that it did not have legal authority to issue such a rule. The federal government is not Constitutionally empowered to prohibit individuals from investing in lawful assets (though it can encourage or discourage investment through de-regulation). People have a right to invest however they want. The SEC seems to have realized this and decided to outsource the work to a private organization to get around this limitation.
The FINRA web site says that FINRA is Congressionally authorized in its activities, and the SEC backs FINRA’s rules. Because of its Congressional origins and the direct SEC (government) sponsorship of these efforts specifically and FINRA rules generally, FINRA is a government entity in a legal context in the sphere of regulating.
That makes this rule subject to legal challenge and strike-down by the courts on Constitutional grounds, including delegation of powers and Fifth Amendment due process violations.
The proposed regulation is also totalistic in its restrictions, ostensibly to intimidate opposition into bargaining and conceding on major points to prevent a worse outcome.
Two can play that game. From the background on options regulations described on FINRA’s web site, it looks like the original options regulations put in place in 1978 were not legal either, for the same reason elucidated above. The Supreme Court is in the process of throwing out decades-old jurisprudence that established a practical balance of power on abortion. We are in a new legal era. I don’t see why the playing field isn’t wide open on everything.
I also observe that just like the SEC’s proposed rule, the timing of this regulation is coincident with a stock market crash. This could be viewed as abuse of power and coercion, since a small net worth leveraged product investor might reasonably conclude it is better to sell everything during this prolonged crash and realize significant capital losses in order to preserve enough capital to be able pass a future wealth test, versus take a chance that the market may fall further and make him altogether ineligible to invest in the entire category because of low net worth. It would take years if not decades to recover with conventional assets the amount lost.
The back-to-back timing and context of these anti-leveraged product efforts appears tantamount to conspiracy of a nominally private organization with the government to deprive people of their rights.
And though government organizations are generally immune to consequences, private entities are not – even when acting as a government entity.
I strongly urge you to cease batting this hornet’s nest and allow your fellow human beings to live freely. Our civilization probably won’t maintain much longer anyway, and you don’t want to have enemies wandering around when it falls.