Tech Billionaire Mark Cuban Argues Stock Regulators Hurt the Economy (sfgate.com)

Tech entrepreneur and investor Mark Cuban denounced America's stock-regulating agency on CNBC this week, arguing that they're reducing the number of companies going public with vague rules that are open-ended. "[W]here there's no clarity and no certainty on what to do in response to the SEC, you get people doing nothing or people avoiding going public or doing anything to avoid dealing with the SEC," Cuban said on CNBC. "And that's a real problem for up and coming companies and it's a problem for the economy as well."

Mary Jo White, the head of America's SEC, had appeared earlier in the week near Silicon Valley, according to Bloomberg, telling an audience at Stanford Law school to be wary of billion-dollar valuation IPOs and warning that founders and startup advisors preparing for an IPO should watch their internal controls, reporting and certifications. "They are doing what the SEC always does," Cuban complained on CNBC. "100 degrees of gray."

Comments

Lack of perspective

[Kjella]

If you're an honest business, you will see many regulations as an absolute hassle and cost. For every Enron there's a hundred relatively honest book-keepers who think the SOX laws as an unnecessary giant pain in the ass. Unfortunately they're needed to keep the market as a whole to function well, just like you need everything from health inspections for restaurants to safety inspections for construction workers. We know many would care anyway, but we also know some don't.

Re:Lack of perspective

[JBMcB]

He's not arguing against regulation - he's saying the regulations are too vague.

For comparison, the FDA's regulations on medical device are insanely detailed. The terminology in the regulations have hyperlinks back to a thesaurus that explain exactly what each word means, and examples of it's usage in regulatory filings, so you know exactly what they mean. If something is due in 30 days, it's explained that it's 30 contiguous calendar days, starting from the day some event happened and ending at midnight on the day due.

SEC regulations can be maddeningly vague. Lots of "as soon as possible" and "within reason" and "as needed." So if you suffer a data breach, you need to notify your stockholders "as soon as possible." Well how soon is that? Within an hour? When you have all the relevant information on the impact? A month? An hour? Even if you are completely honest and up-front, it's possible to run afoul of a regulation like this, simply because it's up to some bureaucrat to decide if you've broken a vague regulation or not.

Re:Lack of perspective

[Anonymous Coward]

you missed his point entirely. it's not that there's regulations; it's that they are so vague and unevenly enforced. honest businesses try to exceed the vague requirements and still get burned. criminal businesses bend the rules as much as possible and get away with it for years until they are caught after millions are lost.

Re: Lack of perspective

[Anonymous Coward]

What an a$hole. Public companies are the ones really hurting the economy. They don't aim to employ, the don't aim to produce, they don't aim to create, they don't aim to have a long term strategy. Instead they aim to please an imaginary anonymous ugly gelatinous blob of all the "investors" which aren't investors but mere stock holders, and said ugly gelatinous blob does not really care if the company exists next quarter, the only thing they want is their earnings at the end of this quarter. That's right, they don't really care about this company next quarter, because the company may fire all the staff and sell all assets just to satisfy the anonymous ugly gelatinous blob desire for some profit this quarter, then the anonymous ugly gelatinous blob will just drop the stock and buy new one of a new company to parasite off.
  if anything public companies should be outlawed or reduced only to companies with named/preferred stock, and the shortest period a person should be allowed to hold a stock is 18 months. This is a real investor, not the speculants these days that don't really care which company and what with their high frequency trading.

Getting in the way

[dbIII]

They are getting in the way of the good old American tradition of claim salting, but he doesn't understand that without them the good old American tradition of tarring, feathering or stringing up from the nearest tree becomes a viable solution to claim salters and other financial tricksters.

By analogy...

[Improv]

"How insulting can I be to someone in a bar without getting a fist in my face?"
"Well, I can offer you advice, but you can't count on it if you make trouble"
"Yes, but that's too vague. I want exact rules!"
"That's not how it works, and trying to get right up to some limit is just asking for trouble"