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Keep The SEC out of Private Investment Markets!

Updated: Sep 25, 2023


The Securities and Exchange Commission is moving to greatly expand its reach over private capital markets in the same manner it has stifled public markets. Trust me, almost no one knows more than me what a disaster this will be for investments in the United States. I willingly, and naively, let the regulators conduct a fishing expedition in our billion-dollar investment firm because my ego wanted to show everyone how pristine our compliance was and how great a leader I was. I was an idiot.


As I detail in the upcoming Forbes Books release in January, When Not If: A CEO’s Guide to Overcoming Adversity, the SEC and FINRA conducted a 6-month search for something to find when there was no there there. FINRA finally claimed we mispriced one private stock which represented only point-two percent (0.2%) of our holdings to earn $140,000 more in fees at a time when our current fees were $8 million. It was so absurd in my mind that I refused three government plea offers and demanded to go to trial against the United States Federal Government, knowing their 98.5% conviction rate. I never said I was bright!


At trial, the external valuation expert confirmed, “It is my conclusion that the share value of $2.88 and the overall company valuation of approximately $500 million arrived at earlier in this memo is conservative,” and the external auditing firm claimed, “Yes, I—I approved—I gave my opinion that the asset value that they put at $2.88 was reasonable, yes.” Facts do not matter when dealing with unconstrained regulatory agencies and federal prosecutors. Don’t allow it to expand more.


FINRA, for example, claims to be a quasi-government agency that operates as a private organization not held to government accountability actions, while at the same time receiving government immunity when challenged by ordinary citizens. It is a giant agency that generates a substantial stream of fines and penalties in its enforcement actions. In 2021, its CEO Robert Cooke earned $3.12 million in salary along with a long list of executives all earning over $1 million themselves. That is horrific.


The Wall Street Journal reports that private market investment returns since 1989 are 50% higher than public markets, U.S. companies now raise almost 4-times as much capital in private versus public markets, and there are about half as many public companies left in our nation since just the 1990’s. Don’t let the government now ruin a thriving private market valued at over $27 Trillion!


I made so many leadership mistakes and never saw our black swan coming as the regulators placed 100 manilla folders in front of me, each holding one email from the hundreds of thousands seized, and asked me “What do think he meant by this email?” Don’t be as naïve, egotistical, and overconfident as I was. Learn from my mistakes. Stop this wild government expansion into the remaining good part of our national economy.


Have a great week!

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