Mark Cuban criticizes the U.S. Securities and Exchange Commission (SEC) for not effectively protecting investors. He likens the SEC to “the QuickBooks of Financial Regulation,” suggesting they are more proficient in bookkeeping than in proactive investor protection. Cuban highlights his involvement with Sharesleuth.com, a platform he owns that uncovers fraudulent activities in public companies. Despite exposing significant frauds, including a company falsely claiming operational capabilities, he notes the SEC’s failure to intervene.
Cuban also addresses the need for updated securities laws, especially for crypto assets. He points out the inadequacies of the Howey test, a legal standard used to determine if a transaction qualifies as an investment contract. Cuban suggests the need for a crypto-specific legal framework, akin to the Howey and Reves tests, the latter being another criterion for identifying securities. He mentions Japan’s approach to requiring collateral for crypto loans as a more effective regulatory strategy, contrasting it with the failure of various crypto services in the absence of such regulations.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.